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?
Life insurance question
- Thread starter Jwill
- Start date
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.
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.
LuketheDog
Well-known member
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.
Brandon270
Well-known member
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.
npaden
Well-known member
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.
GoGriz
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- Jun 11, 2021
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I had something similar and decided to cash it out so I didn’t have to think about it anymore. I say take the cash and use it for something you need, or add to investments or kids college planning.
Gerald Martin
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Cash it out on an adventure style hunt that is epic enough you could potentially die on the adventure? How ironic would that be?
In all seriousness though, if you have additional coverage that will provide for your family, instead of having your family receive the 18K that they will only receive when you are gone, why not cash it out and invest the money in a way that will provide a financial benefit to your family while you are here to enjoy it with them?
