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How to Fight Premium Fatigue

Stephen Denton   |   April 2024   |   1-minute read
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The Problem

For many clients, premium fatigue can occur when they’ve owned whole life, or other cash value life insurance, for a while. When the policies were purchased, they seemed to be the right instrument—they may have protected a young family, built cash value or provided liquidity if needed.

Now, however, the client might not see the value in the policy. If needs have changed, it can feel like they are just paying premiums for coverage they no longer need.

Client Profile

Mike and Linda have shifting priorities as they near their last 10 years before retirement. They own both term and cash value life insurance but haven’t planned for long-term care. Mike’s wondering if the cash value life insurance is the most efficient means of planning for the future.

  • Mike, age 57, and Linda, age 55
  • Paid $50,000 into a life insurance policy with a current cash value of $75,000
  • Linda and her siblings are struggling to fund and provide care for her mom

Possible Solutions

Mike and Linda have four options for their cash value life insurance policy:

  • Stop paying premiums: The policy could start to cannibalize itself through automatic premium loans, causing it to lapse
  • Surrender the policy: This will cause the amount surrendered to be hit with ordinary income tax, and there’s no reason to get a 1099 if it can be avoided
  • Keep the policy as-is: Revisit their original plans and determine if there is any value in it for their current goals
  • Exchange the policy to fund a long-term care solution: A 1035 exchange could allow them to trade an idle asset for a solution to Linda’s concern about funding a possible long-term care event


Mike and Linda were ideal candidates for the last option. They became beneficiaries on their own policy with living benefits. They purchased a single-premium linked-benefit plan for Mike by using a 1035 exchange on the cash value of the life insurance. They used the cashflow previously earmarked for the life insurance premium to purchase a standalone policy for Linda. And they kept their existing term insurance since it still met their needs. And, of course, this new plan eliminated the premium fatigue they were feeling before.

About the Author

As an LTC Specialist for Ash Brokerage, Stephen is committed to helping advisors have long-term care conversations with their clients. Prior to joining Ash, Stephen earned a Bachelor’s in Finance from Rowan University as well as his Series 6 and 63 and life and health licenses. He spent 10 years in the mortgage industry in both sales and operations before transitioning to Lincoln Financial in 2007, where he worked for 14 years as an internal wholesaler for linked benefit products.