What to do with insurance premiums when money gets tight

Q: My husband, son, and I have had universal life insurance policies for several years. Our son's $100,000 policy costs $40 a month, my husband's costs $100, and mine, previously $100 per month, has jumped to $160 a month. Our family's income is $40,000 per year and I'm anxious about premium hikes every few years. We still owe $71,500 on our car and mortgages, so perhaps that $300 a month could be better spent on those bills. I recently switched my life insurance policy to another company, per advice of my insurance representative. Problem: if we discontinue our present policies now, we'll lose the cash surrender value (about $4, 000 in all three policies).
A.C., via e-mail

A: Your policies make sense, says Arthur Stein, a certified financial planner in Bethesda, Md. and frequent speaker on insurance topics.

Granted, they're not as cheap as term coverage. But so-called "permanent" life insurance, including universal life, has many advantages over term insurance, he says, such as death benefits and cash values that should increase over time. Also, the cash value can be accessed tax-free while the insured is alive by taking out loans.

If your current income is not sufficient to pay premiums, then there are ways to reallocate expenditures. Mr. Stein suggests that you could switch from a 15- to a 30-year mortgage, for instance, and use the monthly savings to pay the insurance. You also could save money by raising deductibles on your home and auto insurance policies.

Stein expresses concern, however, over your recent change of policies. Why drop one for another that costs 60 percent more? You need the insurance rep to explain that move, he says.

Q: I'm looking for a website that will evaluate stocks by their dividend. Example: all stocks returning a 4 percent dividend.
B.P., via e-mail

A: Judson Gee, managing partner of JHG Financial Advisors, in Charlotte, N.C., suggests several sites to screen for dividend-paying stocks. First among them would be MSN Money (moneycentral.msn.com). This site has a stock screener where you can filter any number of variables, including dividend yields.

Or try StockFetcher.com (www.stockfetcher.com). The site lets you type in a series of phrases such as "dividend yield is between 2 and 8 percent" and/or "stock price is between $10 and $50," Mr. Gee says. It is not great for telling you what the actual dividend is for each stock, but you can cross reference those into a "Portfolio Watch List" you can create at MSN Money.

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