Critical illness coverage - expensive

A policyholder was sold a critical illness coverage at age 55. She paid $17,000 in premium for 6 years and received a total of $9,000 when the policy was terminated. The cost of the insurance was $8,000 for 6 years for a coverage of about $45,000.

She decided to terminate the policy after finding out that the non-guaranteed benefit (i.e. bonus) had reduced by 75% from the initial projection.

She asked:

1. Should the agent recommend this coverage for me, when I was already 55 years old?
2. Did I make the right decision to terminate my policy after 6 years?

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MY REPLY:

The agent was required to assess your needs and to offer a suitable plan for you. It depends on your needs, and the discussion that you had with your agent.

If I were in your position, I would probably have taken the same decision to terminate the policy. This plan is costly and the cost has increased due to the reduction in the bonus.