Should we cash in the policy

[chrisCD]

We are trying to reduce debt and just received our updated statement for my wife's WL policy.  It has about a $7K value and we have paid about $10K in premiums so it hasn't broken even, we have had it for 17-years.  Of course it really isn't supposed to break even, because if it did the insurance company would begin to lose $, correct?  The cash value is invested in various mutual funds that the company offers.

I didn't do the math on the break even point, but I realized that if my wife lives another 40 years, the pay out is about $70K and the insurance company still wouldn't break even.  Do most people cash these in early, thus the insurance company wins because it never gets to the end?

It would be nice to reduce the debt, but thinking this policy isn't all that bad.

Thoughts?

[jfoxcpacfp]

I vote to cash it in and invest the $588/year. Or 1035 to a variable annuity and then cash it out and deduct the loss or continue with a better-diversified low-load annuity.

[Craigy]

chrisCD wrote:

  Do most people cash these in early, thus the insurance company wins because it never gets to the end?

 

Click to expand...

Yes.  Most policies lapse for one reason or another before payout.