Cash out the whole life?

skydivingchic · #1 (**permalink**) 02-29-2008, 09:10 PM

When I was young, my parents bought a $10,000 whole life policy on me. They paid the premiums and for quite some time the yields would pay for the policy premium. A few years ago, however, they received notice that the dividends were no longer enough to cover the premiums. I am now 31 and on my own, so the policy was transferred over to my name and they left the decision of whether or not to keep it up to me. I have paid the difference between the annual premium ($75) and the dividends each year for several years now. That has run somewhere around $50-$60 each year. The cash value is currently just shy of $1300. The premium is fixed.

I am single and own a condo with my boyfriend. I have life insurance through work which is enough to cover the balance of our mortgage and then some. Our finances otherwise are completely separate. We do not have nor will have children, so that is not an issue. So my question to you fine folks - do I continue putting approximately $50/year into this policy, or do I cash out?

disneysteve · #2 (**permalink**) 03-01-2008, 06:53 AM

I say cash it out. You have coverage through work that will handle the mortgage. You have no dependents and have no other need for insurance. Why waste $50/year? Plus, you can put that $1,300 to better use.

One thing I'd consider is to buy a term policy on your own. Policies through work are nice but the company can always decide to cut that benefit, or you could leave the job and be left uninsured. At 31, a small term policy would be quite cheap.

Keen · #3 (**permalink**) 03-03-2008, 03:32 PM

cash it out...use the money for savings and.or debt and pick up some term life policys...

maat55 · #4 (**permalink**) 03-03-2008, 04:28 PM

Cash it out, whole life policies are worthless.

Like2Plan · #5 (**permalink**) 03-04-2008, 03:09 PM

skydivingchic,
How much sky diving do you do? If you elect to cancel and get new ins, make sure that is covered on your new policy.

DebbieL · #6 (**permalink**) 03-04-2008, 04:52 PM

Insurance policies do get very expensive if you do anything like sky diving. Those risky hobbies really make a difference on the rates - ouch!

CreditExpert · #7 (**permalink**) 04-16-2008, 10:50 AM

cash it out, and invest the money in something else