Retirement: Corning's Group Universal Life insurance and retirement

  • 7th Nov 2024
  • 3 min read

This message is for those still employed.

Corning provides some life insurance by default. Somewhere early in my career, I was offered the option to pay for extra life insurance. The choices were multiples of my salary, and I signed up for 5X. I paid for this insurance my entire career.

First, I have some advice. If you're also paying for extra Group Universal Life (GUL), you should reconsider. My reasoning:

  1. Paying for life insurance via payroll deductions is painless, but it's easy to ignore the high cost of that insurance over time. The cost goes up every few years.

  2. If you should lose your job, you either lose your life insurance, or pay the high premiums to keep it. This feels like too many eggs in one basket to me.

  3. You should carefully consider your true life insurance needs and shop. You'll likely find a better deal, and you don't have to worry as much if you should lose your job.

But here you are, a few years from retirement and you've been paying for extra GUL insurance. I'm going to share what happened in my case.

  1. I received a letter on 10/25 dated 10/16 concerning my GUL. I had a choice to make.

    a) Keep paying very high premiums for the same coverage with the promise of increasing premiums as I age.

    b) Convert the insurance into some other policy with a different payout.

    c) Surrender the policy, which had a surrender value of a little over $1,200.

  2. On 10/28 I called MetLife and chose to surrender the policy. My financial advisor and I had talked about this and he suggested I didn't need a lot of life insurance in my plan.

  3. On 11/1 I received a check from MetLife for around $16. Took me by surprise.

  4. On 11/4 I called MetLife to get an explanation. I was transferred once, explained the situation a 2nd time (why $16 instead of $1,200?), put on hold, then told it was an error and I would receive the balance of the surrender value via check within 10 days. I was feeling good about the call.

  5. Today (11/7) MetLife called me. The person explained that the check I received was correct. When I asked her to explain how that was possible, I got to see how the sausage is made.

    a) Corning collects the GUL premium from my paycheck. b) The premium finds its way to MetLife the following month and goes into a cash account. c) MetLife takes the premium from the cash account. d) My surrender value was used to pay my Sep and Oct GUL premiums.

Summary: The GUL insurance isn't a money making surprise at retirement. Yes you can pro-actively call to surrender the insurance earlier, but the results are going to be about the same. If you still need life insurance, shop for a better deal. Don't keep you eggs in one basket.