Ollin Magnetic Digiscoping System

Life insurance question

Jwill

Well-known member
Joined
Nov 7, 2011
Messages
1,799
Location
Virginia
Have a small policy that my parents got for me around birth, currently mid forties, trying to decide if I should keep paying or cash it... $10k base value, addtl paid up $8K, so total payout if I kicked the bucket would be about $18k. Cash value $6,500. I'm paying $80/yr and it paid a $26 dividend last year. What would you do - let it ride, cash it, something else?
 
At your age, if you’re in good health I would price some term insurance. For the same price per year you’d probably be looking at at least $100k in coverage. Once that’s in place I’d cash it out.

If you have health issues where getting additional insurance is a problem let it ride.

It’s all personal planning and choice. I do not look at life insurance as an investment, it’s a transfer of risk (no different than house or car insurance). In almost every circumstance I can invest in a plain S&P fund and get a way better return than anything through whole life insurance.
 
Are you single? Married? Kids? If there are no spouse or kids in the pic I'd just scrap it and invest in something better, otherwise I'd pick up a term plan to take care of your family if you die.
 
Like said above, a term life policy has way more bang for the buck if you have a family that relies on your income. I got a $500k 30 year term life policy at age 30 a few years ago and it costs $315/year.
 
Married, 3 kids, and have about $500k coverage through work. I don't really think of this as something that we necessarily need, just a carryover from my parent's estate that I need to figure out what to do with...
 
Generally on those whole life policies the fees (commission to the salesman) are front loaded so that once you have them about 15 or 20 years it just makes sense to keep them. The policy value is probably going to be growing by at least what you are putting in there so essentially by now it is free insurance. More than likely it is going to be growing the cash value and paid up balance by $200 - $300 a year while paying $80 a year. Not the S&P 500 but it would be hard for me to cash it out.
 
Back
Top