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What to do with a whole life insurance policy when leaving a group practice

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  • What to do with a whole life insurance policy when leaving a group practice

    Dear White Coat community:  I am facing an issue upon leaving my group practice where I was a partner and the group bought each partner a whole life insurance.  (Started by the senior partner probably persuaded by a very convincing insurance agent).  Now I have this policy for about three years with very little cash value.  And I am offered a new contract to work for hospital.  What should I do with this whole life insurance policy?  I personally prefer term life insurance, but I feel it is a waste to just give up this whole life insurance policy.

    Thanks for all your expertise I definitely need help!

    JS

  • #2
    That is great information.

    I type in 1035 exchange and it seems like it can be even converted to an annuity.  Do I have to go through an insurance agent to accomplish it?  Thanks

     

    JS

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    • #3
      Get term in place first.

      Consider doing the exchange to preserve the loss. Basically, you leave it in the VA until it equals the basis, then cash out the VA and go invest it elsewhere.

      I wish doctors wouldn't do this to each other.

      Whole life is like marriage- either til death do you part, or it is going to be a very expensive mistake.
      Helping those who wear the white coat get a fair shake on Wall Street since 2011

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      • #4
        So I can call vanguard to initiate this process once I terminate my partnership?  Or should I do that before so the policy has no gap?  Thank you so much!

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        • #5
          The way this is likely set up is that you would have to start making the payments as soon as you separate. So you just want to make sure it doesn't lapse before the exchange. Figure out when the last payment was made, when the next is due, and try to do the exchange before then.
          Helping those who wear the white coat get a fair shake on Wall Street since 2011

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