Life Insurance?

[bbbot2]

Hi,
Twelve years ago while emplyoed by a major corporation I started paying into a million dollar life insurance policy. This seemed like a good idea, while I was gainfully employed. Since then life has been tough, laid off, working on contracts that only last a few months, an income that has dropped by more than half.
Making payments on the policy has been even tougher. Now I am faced with making a $1233 payment or losing the policy, it has no equity, eaten up by late payments and money withdrawn over the years.
My income is not great, I'm earning less than 60K a year. I have two kids, one in high school and one off to college. My question, at a cost of nearly $3000 a year, is this policy worth it?
Any advice would be appreciated.
Thanks

[disneysteve]

It sounds like you are referring to a whole life policy. Forget it. They are a total rip off 99.9% of the time. Get yourself a term life policy. Once that is in effect, cancel the whole life policy.

[jpg7n16]

Hi,
Twelve years ago while emplyoed by a major corporation I started paying into a million dollar life insurance policy. This seemed like a good idea, while I was gainfully employed. Since then life has been tough, laid off, working on contracts that only last a few months, an income that has dropped by more than half.
Making payments on the policy has been even tougher. Now I am faced with making a $1233 payment or losing the policy, it has no equity, eaten up by late payments and money withdrawn over the years.
My income is not great, I'm earning less than 60K a year. I have two kids, one in high school and one off to college. My question, at a cost of nearly $3000 a year, is this policy worth it?
Any advice would be appreciated.
Thanks

I would let that policy lapse, and get a term one for a lower face value. Do you still need 1 mil of life insurance coverage? Not likely.

what is the tax rate for mutual funds ?

I fail to see how this is related to the OP's question.

Short term (held less than 1 year): Ordinary Income
Long term (held more than 365 days): long term cap gains (15%)

[em1880]

I say drop it and get a term policy. You already have 1 kid in college, I think 1 million is way too much in your situation, especially if you are having trouble paying the prem.

[disneysteve]

I would let that policy lapse, and get a term one

I say drop it and get a term policy.

I agree, as I said above, but DO NOT let the current policy lapse UNTIL the new policy is in effect.

As for the amount of the new policy, sit down and figure out what your insurance needs are. One million may be too high, or maybe not. It all depends on your income, your debt, your marital situation, the needs to the kids, etc. There are various online calculators for determining your insurance needs.

[JohnSaveOn]

Denise and Steve make excellent points. The most important thing is to make sure a new policy is in effect before you cancel your old one. In my opinion, a whole life insurance policy seems to be unnecessary with a yearly salary under 60K. Looking into term life insurance policy is most likely your best option.

[savana]

I will do suggest you to have term policy not whole policy as it is more expensive than term. You just have to think about till how long you can pay and for long you need.