Author Topic: Should I keep existing whole life insurance policy?  (Read 7946 times)

Sibley

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Should I keep existing whole life insurance policy?
« on: July 09, 2016, 03:55:06 PM »
I'd like some insight into pros/cons of keeping my existing whole life policy. The policy was purchased by my parents when I was a baby. I tend to forget about this policy, but figured I'd re-examine it. If I do cancel it, the cash would be added to my down payment savings account earning 1%.

Current information:

Death benefit  39,269
Cash value  5,800
Annual premium  152.35 (I pay)
No loans outstanding
The insurance company is financially strong.

I'm leaning towards leaving it alone, but given the wealth of information you all have, I'd appreciate any thoughts. If any more information is needed, I have the original policy booklet from 1987.

Another Reader

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Re: Should I keep existing whole life insurance policy?
« Reply #1 on: July 09, 2016, 04:02:30 PM »
Is it accruing interest?  What is the crediting rate?  Net out the rate of return.  If it's better than the on-line bank pays, consider it an emergency fund or savings account.

Sibley

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Re: Should I keep existing whole life insurance policy?
« Reply #2 on: July 09, 2016, 04:15:10 PM »
No interest, but it does have dividend additions. Looks like it's about $360 a year of dividends on average, so less than 2% a year. Not great of course, but the cash value if I do cancel it would go into a 1% online savings account.

ETA: Cause I've been researching.
Crediting rate - not sure.
The dividends are applied to "paid up additional insurance", meaning I get more life insurance.

I don't think I'll do anything now, so really wondering if I want to cancel it next year when I buy my first house and use the money to pad the downpayment.
« Last Edit: July 09, 2016, 04:36:38 PM by Sibley »

Malaysia41

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Re: Should I keep existing whole life insurance policy?
« Reply #3 on: July 09, 2016, 04:27:39 PM »
In general, whole life policies are not advantageous except in the case where you have tremendous wealth - as in multiple millions of dollars - and are using insurance as a way to circumvent estate taxes. Since you have a house down-payment savings account, I'm assuming that your wealth isn't on this order of magnitude.

I tend to be in the "don't 'invest $' with insurance companies" camp. Source: I earned a CFP certificate in 2008. I am not currently a CFP professional, as I stopped paying dues in 2010 (I used the knowledge for my own personal use). But I studied insurance fairly thoroughly for that exam, and I don't believe the industry has fundamentally changed since then.  Here are my thoughts:

If your parents have been paying $152.35 a year, then they've earned roughly 1.7% on their money over 29 years for a current cash value of 5800.

I'm assuming you are 29 years old. You should be able to get a 30 year term, $100k death benefit for $10/mo(Female)$13/month(Male) or $120-$156/year - for 2.5 times the death benefit. Of course, this means the benefit will end after 30 years, whereas whole life insurance is for your whole life.

After 30 years, if you are able to return 6.6% on that 5800, you would have a balance roughly equivalent to the death benefit of the whole life policy... but you'll have the $ at age 59, well before death. Your 30 year term would expire at that time, but hey, you'll have $39k.

So, personally, I'd take the cash, invest it, and buy the cheapest basic term policy I could find, with no investment component. Now - this is assuming you have dependents who would be screwed financially if you died, or it assumes you will have such dependents in the future. Locking in this low policy premium at 29 could be a wise move. If you don't foresee having such dependents, then there's little need for term insurance, or consider getting a $50k policy if you can.

This is a good article about comparing whole life to term.

Good luck.



Spork

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Re: Should I keep existing whole life insurance policy?
« Reply #4 on: July 09, 2016, 04:36:42 PM »
My parents did something similar for me and my siblings when I was in my 20s.  I think it was an attempt to protect each of our spouses.  Moreover, the insurance salesman was a very close friend of my father and fully bought into the "whole life is a great investment vehicle" thing.

I never wanted it... and had very reasonable life insurance with my employer for free.  I canceled mine... and it was quite difficult doing so.  The family-friend agent DID NOT want me to do it.  (I was going to miss out on such an opportunity!)  It took 4 or 5 attempts over several years to get it canceled.  But I took the cash.  I believe is was roughly what my dad had put into it. 

Sibley

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Re: Should I keep existing whole life insurance policy?
« Reply #5 on: July 09, 2016, 04:41:27 PM »
You are correct, I'm not fabulously wealthy. Yet. Parents bought it with insurance money they got when my grandmother died (I think? Someone died.)

I have significantly more term life insurance as a benefit through work, no cost to me. My parents paid until I graduated college and got a job, then I took it over. I'm thinking I'll just let it ride for now, since the next premium payment isn't until Feb 2017. At that point, I can cancel and get the cash value and add to my downpayment.

Goldielocks

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Re: Should I keep existing whole life insurance policy?
« Reply #6 on: July 09, 2016, 05:22:46 PM »
What you essentially have is a 5800 savings bond (guaranteed investment) at some unknown interest rate (low), and $159 fee for $40k of insurance.

So, unless your premiums would end in not too many years and you will be fully paid up, you have very, very expensive insurance.   e.g., how much of your annual premium goes to insurance, and how much is invested to your "savings bond"?

The big question is when do your premiums end?  How much does the insurance portion actually cost you?


If you are satisfied that this is similar in cost to a savings bond + adding cash annually to increase that savings bond + term insurance value, from this point on wards, then yes, whole life has some advantages in the fact that you can borrow against it, and it will be very quickly paid out, outside of your estate, to whomever you choose when you die.  (easier than a savings account in your own name, anyway).

Choices

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Re: Should I keep existing whole life insurance policy?
« Reply #7 on: July 09, 2016, 06:37:26 PM »
If you're healthy, I agree w/ the previous posters. Get a term policy for what you need if you have/are planning to have dependents, then cancel the whole life policy and save or invest the extra money.

It's great that you have a term policy through work, but what if you get diabetes/cancer and then switch jobs or get laid off? You'll be uninsurable. So, it wouldn't hurt to have your own term policy for as many years as it will take for you to amass a net worth high enough that your dependents don't need the policy.

thisisjeopardy

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Re: Should I keep existing whole life insurance policy?
« Reply #8 on: July 10, 2016, 11:32:00 AM »
The sooner you get out the more you save.

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Jim2001

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Re: Should I keep existing whole life insurance policy?
« Reply #9 on: July 10, 2016, 01:06:24 PM »
+1 for Malaysia's assessment and others.  If you need life insurance, buy a personal term policy.  You never know what might come up and raise your rates, or worse, make you un-insurable.

tomsang

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Re: Should I keep existing whole life insurance policy?
« Reply #10 on: July 10, 2016, 01:14:52 PM »
If it is going into a savings account that is going to earn 1%, then it is a no brainer to keep the investment that is earning 2%.  Once you sell it, you will also be paying taxes on the accumulation of dividends throughout the life of the policy.  I am not sure if that matters. 

I was able to pull out the dividends, when I needed some money for an investment.  I was going to cash out the policy and my agent said that it would be better to just pull out the dividends that have accrued.  It took about 10 minutes for them to write me a check for $5kish.  So I found it to be a very liquid account that pays a decent return.

Keep it unless you have a more lucrative investment. Also ask about pulling out dividends vs. selling. 

beltim

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Re: Should I keep existing whole life insurance policy?
« Reply #11 on: July 10, 2016, 02:09:52 PM »
No interest, but it does have dividend additions. Looks like it's about $360 a year of dividends on average, so less than 2% a year. Not great of course, but the cash value if I do cancel it would go into a 1% online savings account.

It seems like everyone's using this 2% figure, but I don't see how you get it.  Shouldn't it be $360 / $5800 cash value = 6.2% ?  Then of course you have to pay to get it, so if we reduce that dividend by 60% of your annual premium (since there is still the insurance component that costs something), then 360 - .4(150) = 300.  300 / 5800 = 5.2%.

Depending on how stable or guaranteed that 5.2% rate it, it actually looks like a pretty good deal at this point.

Capsu78

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Re: Should I keep existing whole life insurance policy?
« Reply #12 on: July 10, 2016, 02:37:01 PM »
Emotional argument here- I let the policy my parents bought for me lapse right about the same age as you are- first home buying time.  My parents are gone now and I wish I would have kept it in force just as a connect to them.  It's not really that much money either way- cashing it or keeping it doesn't move the needles much in either direction. 
The commissions have already been sqeezed out of it for the most part and in the event of a worst case. That is also an appropriate amount of tax free money for expenses related to a untimely demise that could be delivered to your survivors 3 business days after presentation of a death certificate  , per my whole life agent.

tomsang

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Re: Should I keep existing whole life insurance policy?
« Reply #13 on: July 10, 2016, 02:49:17 PM »
No interest, but it does have dividend additions. Looks like it's about $360 a year of dividends on average, so less than 2% a year. Not great of course, but the cash value if I do cancel it would go into a 1% online savings account.

It seems like everyone's using this 2% figure, but I don't see how you get it.  Shouldn't it be $360 / $5800 cash value = 6.2% ?  Then of course you have to pay to get it, so if we reduce that dividend by 60% of your annual premium (since there is still the insurance component that costs something), then 360 - .4(150) = 300.  300 / 5800 = 5.2%.

Depending on how stable or guaranteed that 5.2% rate it, it actually looks like a pretty good deal at this point.

I actually thought it sounded low, but did not pull out the calculator or mental energy to calculate.  My policy has always paid in the 4% to 9% range over the years with the lower percentages being the more recent years.  When I had more free cash laying around I was going to ask them how much I could add to the surrender value.  I believe you can make extra payments if you want it to grow. I was going to inquire about adding $50k as it was a great yield and I don't like money sitting in my checking account. 

My grandfather bought this $10,000 policy when I was child.  The annual payment is less than $30, but you can just use the dividends if you don't want to pay the amount.  So the cost for a good yielding investment with a tiny amount of insurance was worth the annual payment. 

tonysemail

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Re: Should I keep existing whole life insurance policy?
« Reply #14 on: July 10, 2016, 05:37:25 PM »
Why do you choose paid up additions instead of applying dividends to paying the premium?

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Sibley

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Re: Should I keep existing whole life insurance policy?
« Reply #15 on: July 11, 2016, 09:29:45 AM »
No interest, but it does have dividend additions. Looks like it's about $360 a year of dividends on average, so less than 2% a year. Not great of course, but the cash value if I do cancel it would go into a 1% online savings account.

It seems like everyone's using this 2% figure, but I don't see how you get it.  Shouldn't it be $360 / $5800 cash value = 6.2% ?  Then of course you have to pay to get it, so if we reduce that dividend by 60% of your annual premium (since there is still the insurance component that costs something), then 360 - .4(150) = 300.  300 / 5800 = 5.2%.

Depending on how stable or guaranteed that 5.2% rate it, it actually looks like a pretty good deal at this point.

The amount I could get by cancelling (cash value) is a fraction of the total amounts. I calculated the less than 2% based on total numbers, not just the cash value amounts.

Death benefit  39,269
Cash value  5,800
Annual premium  152.35 (I pay)
Total dividends received to date (rough number - I'm at work now) $11k. It was an average of $360 a year though.
Policy issued in 1987

Though I totally could have messed up the calculations. Percentages have always been a tad weak for me.
« Last Edit: July 11, 2016, 09:57:34 AM by Sibley »

Sibley

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Re: Should I keep existing whole life insurance policy?
« Reply #16 on: July 11, 2016, 09:30:29 AM »
Why do you choose paid up additions instead of applying dividends to paying the premium?

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I didn't. I was a year old, my parents had the policy issued that way.

Sibley

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Re: Should I keep existing whole life insurance policy?
« Reply #17 on: July 11, 2016, 09:31:53 AM »
Emotional argument here- I let the policy my parents bought for me lapse right about the same age as you are- first home buying time.  My parents are gone now and I wish I would have kept it in force just as a connect to them.  It's not really that much money either way- cashing it or keeping it doesn't move the needles much in either direction. 
The commissions have already been sqeezed out of it for the most part and in the event of a worst case. That is also an appropriate amount of tax free money for expenses related to a untimely demise that could be delivered to your survivors 3 business days after presentation of a death certificate  , per my whole life agent.

I am not sentimental, and believe me I will have plenty to connect me to them. They're likely going to be moving into my future home with me, my dad has dementia and it'll make the most sense at some point. I'll have all their stuff.

beltim

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Re: Should I keep existing whole life insurance policy?
« Reply #18 on: July 11, 2016, 10:12:55 AM »
No interest, but it does have dividend additions. Looks like it's about $360 a year of dividends on average, so less than 2% a year. Not great of course, but the cash value if I do cancel it would go into a 1% online savings account.

It seems like everyone's using this 2% figure, but I don't see how you get it.  Shouldn't it be $360 / $5800 cash value = 6.2% ?  Then of course you have to pay to get it, so if we reduce that dividend by 60% of your annual premium (since there is still the insurance component that costs something), then 360 - .4(150) = 300.  300 / 5800 = 5.2%.

Depending on how stable or guaranteed that 5.2% rate it, it actually looks like a pretty good deal at this point.

The amount I could get by cancelling (cash value) is a fraction of the total amounts. I calculated the less than 2% based on total numbers, not just the cash value amounts.

Death benefit  39,269
Cash value  5,800
Annual premium  152.35 (I pay)
Total dividends received to date (rough number - I'm at work now) $11k. It was an average of $360 a year though.
Policy issued in 1987

Though I totally could have messed up the calculations. Percentages have always been a tad weak for me.

To compare apples to apples, you need to use the cash value, because that's all you would get if you cancelled the policy.

Spork

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Re: Should I keep existing whole life insurance policy?
« Reply #19 on: July 11, 2016, 10:17:04 AM »
Emotional argument here- I let the policy my parents bought for me lapse right about the same age as you are- first home buying time.  My parents are gone now and I wish I would have kept it in force just as a connect to them.  It's not really that much money either way- cashing it or keeping it doesn't move the needles much in either direction. 
The commissions have already been sqeezed out of it for the most part and in the event of a worst case. That is also an appropriate amount of tax free money for expenses related to a untimely demise that could be delivered to your survivors 3 business days after presentation of a death certificate  , per my whole life agent.

I am not sentimental, and believe me I will have plenty to connect me to them. They're likely going to be moving into my future home with me, my dad has dementia and it'll make the most sense at some point. I'll have all their stuff.

I don't mean to hijack the thread.  But let me tell you I totally feel for you.  I went through Alzheimer's with my mom and am now going through some early stages of dementia with my MIL.  Please: take care of yourself.  I'm not saying "don't let them move in with you"... but I am saying to make sure you have the help and support you need if you go down this path.  And make sure you know where the end of you abilities to manage this lies.   My dad tried to keep mom at home for a long time.  Even with outside help, it was mentally and physically exhausting.

I wish you the best of luck and you have lots of empathy from me.

tonysemail

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Re: Should I keep existing whole life insurance policy?
« Reply #20 on: July 11, 2016, 04:06:38 PM »
Why do you choose paid up additions instead of applying dividends to paying the premium?

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I didn't. I was a year old, my parents had the policy issued that way.

thanks for clarifying.  I asked because thought you could change it whenever you wanted.  Oops

dycker1978

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Re: Should I keep existing whole life insurance policy?
« Reply #21 on: July 11, 2016, 04:30:19 PM »
Paid up additions are life insurance that is paid in full.

"A purchase of paid up additions is essentially paying for the death benefit, in full, today. Because it is being paid for, in full (hence the name “paid up”), there are no premiums or insurance costs associated. It is fully paid for insurance. This also means that the dollar you used to pay for the insurance are now dollars added to your cash value. Simply put, its money you put into your policy that goes into cash value, and gives you more death benefit."

So you have $5800 of cash value, and have paid aprox 4418.15 in premiums and gotten aprox $10440 in dividends.  As a poster mentioned above you could get aprox $100k for the same amount of out of pocket expenses.  So you are "investing" you dividends, basically.  $10440 for $5800 cash value.  I think that I would get into a term policy and cut your loses here.

Source: http://becomingyourownbank.com/infinite-banking-what-are-paid-up-additions/

tomsang

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Re: Should I keep existing whole life insurance policy?
« Reply #22 on: July 11, 2016, 04:37:54 PM »
Paid up additions are life insurance that is paid in full.

"A purchase of paid up additions is essentially paying for the death benefit, in full, today. Because it is being paid for, in full (hence the name “paid up”), there are no premiums or insurance costs associated. It is fully paid for insurance. This also means that the dollar you used to pay for the insurance are now dollars added to your cash value. Simply put, its money you put into your policy that goes into cash value, and gives you more death benefit."

So you have $5800 of cash value, and have paid aprox 4418.15 in premiums and gotten aprox $10440 in dividends.  As a poster mentioned above you could get aprox $100k for the same amount of out of pocket expenses.  So you are "investing" you dividends, basically.  $10440 for $5800 cash value.  I think that I would get into a term policy and cut your loses here.

Source: http://becomingyourownbank.com/infinite-banking-what-are-paid-up-additions/


What losses are you referring to?  He is earning over 5% in dividends on his cash surrender value.  He would be stupid to sell and invest it in his bank account earning 1%.  If he has a better use for the investment that pays in excess of 5% on a risk adjusted basis, then yes he should consider selling the policy.

Capsu78

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Re: Should I keep existing whole life insurance policy?
« Reply #23 on: July 11, 2016, 05:03:43 PM »
Emotional argument here- I let the policy my parents bought for me lapse right about the same age as you are- first home buying time.  My parents are gone now and I wish I would have kept it in force just as a connect to them.  It's not really that much money either way- cashing it or keeping it doesn't move the needles much in either direction. 
The commissions have already been sqeezed out of it for the most part and in the event of a worst case. That is also an appropriate amount of tax free money for expenses related to a untimely demise that could be delivered to your survivors 3 business days after presentation of a death certificate  , per my whole life agent.

I am not sentimental, and believe me I will have plenty to connect me to them. They're likely going to be moving into my future home with me, my dad has dementia and it'll make the most sense at some point. I'll have all their stuff.

Totally understandable...My situation was 180 degrees different- I moved cross coasts 2 weeks out of college and never lived in the same time zone as my parents again.  Best of luck on your "caregiver" journey.

Sibley

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Re: Should I keep existing whole life insurance policy?
« Reply #24 on: July 11, 2016, 05:52:20 PM »
Ok, exact numbers for anyone who wants to double check my math :)

                                                  Death Benefit        Cash Value
Basic policy                                   25,000                 3,136
Paid up additions                            3,858                    726
Dividend additions                        10,298                  1,938
Totals                                          39,156                    5,800

Policy was issued Feb 1987.
Annual premium $152.35, next due Feb 2017

Spork- thanks. Luckily, dad's not bad (yet). It's been moving very slowly, so the family has had time to adjust. I can't say exactly what will happen in the future, but we're trying to put things in place to help later. Dementia is a terrible disease. I saw a post somewhere else on the forum where people were afraid their loved ones would die. I'm the opposite - I'm afraid he WON'T die before he's no longer himself. It's a mindset that horrifies people unless they've seen what dementia does.

dycker1978

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Re: Should I keep existing whole life insurance policy?
« Reply #25 on: July 12, 2016, 08:04:22 AM »
Ok, exact numbers for anyone who wants to double check my math :)

                                                  Death Benefit        Cash Value
Basic policy                                   25,000                 3,136
Paid up additions                            3,858                    726
Dividend additions                        10,298                  1,938
Totals                                          39,156                    5,800

Policy was issued Feb 1987.
Annual premium $152.35, next due Feb 2017

Spork- thanks. Luckily, dad's not bad (yet). It's been moving very slowly, so the family has had time to adjust. I can't say exactly what will happen in the future, but we're trying to put things in place to help later. Dementia is a terrible disease. I saw a post somewhere else on the forum where people were afraid their loved ones would die. I'm the opposite - I'm afraid he WON'T die before he's no longer himself. It's a mindset that horrifies people unless they've seen what dementia does.

So the way whole life works is the surrender value of this policy is $5800.  That is all you will get unless you die. 

If you die you only get the $40k out.  You do not get the surrender value and the policy value.

So currently you have "invested" $4400 to get back $5500 over 29 years (poor return).  if you live for say, another 40 years(spit balling that you are 29 now and will live to 69) you will pay another $6500 in premium, and have a benefit of $40,000.  so $12,000 for $40k.  Not a great return either for 60+ years in the market.

If you pull the $5500 and only invest that at 7% average rate of return for 40 years you will have aprox $82, 400, not the 40K that the policy is worth.  If you purchase a term insurance policy, and invest the difference in premium, or just invest the premium you will be much, much farter ahead.

Whole life policies are generally only good for the people selling them.  Or for large estates to avoid some legalities. 

beltim

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Re: Should I keep existing whole life insurance policy?
« Reply #26 on: July 12, 2016, 11:38:37 AM »
Ok, exact numbers for anyone who wants to double check my math :)

                                                  Death Benefit        Cash Value
Basic policy                                   25,000                 3,136
Paid up additions                            3,858                    726
Dividend additions                        10,298                  1,938
Totals                                          39,156                    5,800

Policy was issued Feb 1987.
Annual premium $152.35, next due Feb 2017

Spork- thanks. Luckily, dad's not bad (yet). It's been moving very slowly, so the family has had time to adjust. I can't say exactly what will happen in the future, but we're trying to put things in place to help later. Dementia is a terrible disease. I saw a post somewhere else on the forum where people were afraid their loved ones would die. I'm the opposite - I'm afraid he WON'T die before he's no longer himself. It's a mindset that horrifies people unless they've seen what dementia does.

So the way whole life works is the surrender value of this policy is $5800.  That is all you will get unless you die. 

If you die you only get the $40k out.  You do not get the surrender value and the policy value.

So currently you have "invested" $4400 to get back $5500 over 29 years (poor return).  if you live for say, another 40 years(spit balling that you are 29 now and will live to 69) you will pay another $6500 in premium, and have a benefit of $40,000.  so $12,000 for $40k.  Not a great return either for 60+ years in the market.

If you pull the $5500 and only invest that at 7% average rate of return for 40 years you will have aprox $82, 400, not the 40K that the policy is worth.  If you purchase a term insurance policy, and invest the difference in premium, or just invest the premium you will be much, much farter ahead.

Whole life policies are generally only good for the people selling them.  Or for large estates to avoid some legalities.

This is stunningly bad math.  You're comparing apples to bicycle tires in some places.

You are correct on the surrender value, but you totally neglect to include the dividends the policy is currently paying.  Depending on how you calculate it, that's a 5.2-6.2% return, which is directly comparable to the 7% rate of return that you quoted, except the 5.2-6.2% return may be guaranteed.

While this might have been a bad investment to start, the proper consideration for what to do with it now does not depend at all on the past.

tonysemail

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Re: Should I keep existing whole life insurance policy?
« Reply #27 on: July 12, 2016, 11:55:20 AM »
This is stunningly bad math.  You're comparing apples to bicycle tires in some places.

You are correct on the surrender value, but you totally neglect to include the dividends the policy is currently paying.  Depending on how you calculate it, that's a 5.2-6.2% return, which is directly comparable to the 7% rate of return that you quoted, except the 5.2-6.2% return may be guaranteed.

While this might have been a bad investment to start, the proper consideration for what to do with it now does not depend at all on the past.

Aren't the dividends "trapped" in paid up additions?
Since they aren't accessible, you don't earn the 5-6% guaranteed return.
I agree it would be nice to change the dividend option, but it seems that is not possible on this policy?

Sibley

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Re: Should I keep existing whole life insurance policy?
« Reply #28 on: July 12, 2016, 11:58:09 AM »
I can't change the policy. I do plan to cancel it early 2017, and use it as part of my down payment when I buy a house next year (I'll keep lots of documentation on where the money came from, I'm sure the bank will want to know).

The dividend return you're coming up with is better than my math. I guess I need to work on math...

beltim

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Re: Should I keep existing whole life insurance policy?
« Reply #29 on: July 12, 2016, 12:17:14 PM »
This is stunningly bad math.  You're comparing apples to bicycle tires in some places.

You are correct on the surrender value, but you totally neglect to include the dividends the policy is currently paying.  Depending on how you calculate it, that's a 5.2-6.2% return, which is directly comparable to the 7% rate of return that you quoted, except the 5.2-6.2% return may be guaranteed.

While this might have been a bad investment to start, the proper consideration for what to do with it now does not depend at all on the past.

Aren't the dividends "trapped" in paid up additions?
Since they aren't accessible, you don't earn the 5-6% guaranteed return.
I agree it would be nice to change the dividend option, but it seems that is not possible on this policy?

It depends on how the dividends are credited to the account.  The cash value is not just a multiplication factor away from each of the "death benefits" amounts, so I can't tell from the information given.  How the dividends get credited to the cash value will play a huge role in figuring out the equivalent dividend rate.

Spork

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Re: Should I keep existing whole life insurance policy?
« Reply #30 on: July 12, 2016, 12:32:43 PM »

Spork- thanks. Luckily, dad's not bad (yet). It's been moving very slowly, so the family has had time to adjust. I can't say exactly what will happen in the future, but we're trying to put things in place to help later. Dementia is a terrible disease. I saw a post somewhere else on the forum where people were afraid their loved ones would die. I'm the opposite - I'm afraid he WON'T die before he's no longer himself. It's a mindset that horrifies people unless they've seen what dementia does.

I totally understand how you feel.

tomsang

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Re: Should I keep existing whole life insurance policy?
« Reply #31 on: July 12, 2016, 07:24:10 PM »
I can't change the policy. I do plan to cancel it early 2017, and use it as part of my down payment when I buy a house next year (I'll keep lots of documentation on where the money came from, I'm sure the bank will want to know).

The dividend return you're coming up with is better than my math. I guess I need to work on math...

Talk with your agent.  You have the ability to pull out all of the dividends immediately.  I received mine approximately 15 minutes after sitting down to cash out my policy. She explained why it made more sense to pull out the dividends then to cash out the policy.   There are a number of reasons, why pulling out the dividends makes more sense then cancelling your policy.  Get the information from your agent.  The yield on these policies is not bad for a cash equivalent item.  As mentioned earlier, I was contemplating putting in sizable money to take advantage of the dividend yield. 

Sibley

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Re: Should I keep existing whole life insurance policy?
« Reply #32 on: July 12, 2016, 07:31:06 PM »
I can't change the policy. I do plan to cancel it early 2017, and use it as part of my down payment when I buy a house next year (I'll keep lots of documentation on where the money came from, I'm sure the bank will want to know).

The dividend return you're coming up with is better than my math. I guess I need to work on math...

Talk with your agent.  You have the ability to pull out all of the dividends immediately.  I received mine approximately 15 minutes after sitting down to cash out my policy. She explained why it made more sense to pull out the dividends then to cash out the policy.   There are a number of reasons, why pulling out the dividends makes more sense then cancelling your policy.  Get the information from your agent.  The yield on these policies is not bad for a cash equivalent item.  As mentioned earlier, I was contemplating putting in sizable money to take advantage of the dividend yield.

Interesting. I will talk to them, I would be happy to pull out the dividends if I can.