65 Life Permanent Life Insurance

[mboston]

I made a decision 3 years ago to buy a whole life insurance policy that is $2,400 annually. I currently have invested around $7,800 into this program and the cash value and surrender value are $4,212. I have heard a great deal of negative things about permanent life insurance that has a death benefit and cash value. Do I quit paying for this and let the money that is in there currently ride or do I pull the cash value of $4,212 and take a roughly $3,500 hit on my money? Or do I keep investing into it since I am already in? I do not need the money and I am 28 years old and could afford letting it ride until the cash value breaks even on my money which is in about 7-10 years.

[pierre]

Definitely don't put more into it.

The numbers are inconsequential, so whether you let it ride or take the loss won't matter in the long.

[GasFIRE]

Personally I would pull out the cash value and consider the $3500 loss as tuition in the school of WLI. Continuing the policy until break even means your total return is 0%, don’t fall for the fallacy of spending new money (future premiums) to get caught up. What you’ve paid so far is a sunk cost, time to move on. Take the $2400 cash value plus what you would have paid in future premiums and invest it in your personal accounts whether taxable or retirement. If you need life insurance, get a term policy.

[MaxPower]

Aren’t you the same poster who recently asked about buying into a VUL plan? You need to find some new “friends.”

Google “sunk cost fallacy.”

[mboston]

Aren’t you the same poster who recently asked about buying into a VUL plan? You need to find some new “friends.”

Google “sunk cost fallacy.”

Unfortunetely yes. The same "advisor" I was speaking about sold me on this plan 3 years ago. I am starting to see the trend that he "advises" for his own good.

[MaxPower]

Unfortunetely yes. The same "advisor" I was speaking about sold me on this plan 3 years ago. I am starting to see the trend that he "advises" for his own good.

Ding ding ding!!

[racelari]

get out of there! if it makes you feel better, I went 7 years into a NWM paid to 65 WLI policy with $1mil benefit, and bought the same for my wife. We lost $50K I myself did a 1035 exchange into a low cost VA because I wanted to recoup that $50k tax free by preserving the cost basis. You on the other hand have such a minimal loss count your blessings you are are not as stupid as me and cash out the policy.

[mboston]

get out of there! if it makes you feel better, I went 7 years into a NWM paid to 65 WLI policy with $1mil benefit, and bought the same for my wife. We lost $50K I myself did a 1035 exchange into a low cost VA because I wanted to recoup that $50k tax free by preserving the cost basis. You on the other hand have such a minimal loss count your blessings you are are not as stupid as me and cash out the policy.

This policy is as well through NWM. Thank you for the advice! I am jumping ship. My gut was never right about this policy and I never did my research prior so I bought into it.

[Tim]

“My gut was never right about this policy ”
Not sure why you didn’t listen. Sometimes the correct move is to do nothing. Try that. No research required.