Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Whole Life Ins.
Old 06-05-2005, 08:17 PM   #1
Thinks s/he gets paid by the post
73ss454's Avatar
 
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,378
Whole Life Ins.

Can you guys advise me on the best thing to do with a paid up
Whole Life Policy (500K).
Is there a general rule of thumb as to the best time to take the cash value. (120K)
Or does it pay just to keep it if the money is not needed at this point.
Can it be turned into an Annuity or some other type of vehicle for future income.
I plan on ER next year.
Thanks,
JOE
__________________

__________________
Work is something you do to get enough $ so you don't have to....Me.
73ss454 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Whole Life Ins.
Old 06-06-2005, 06:05 AM   #2
Thinks s/he gets paid by the post
BUM's Avatar
 
Join Date: Feb 2004
Location: Mid Hudson Valley
Posts: 1,778
Re: Whole Life Ins.

This is a question for your agent to answer. Personally, since ER I've cashed in. I told DW I'd rather spend the money with her now than get a check after one of us dies.

Another option is to ignore it and its cash value will pay the premiums for you. Regardless you paid for it and likely needed the coverage when you were younger. Now you probably don't. The final choice is to have the death benefit go to the beneficiary or take whatever cash is available and run.

BUM
__________________

__________________
In a panamax down by the river.
BUM is offline   Reply With Quote
Re: Whole Life Ins.
Old 06-06-2005, 06:32 AM   #3
Thinks s/he gets paid by the post
 
Join Date: Dec 2002
Posts: 3,875
Re: Whole Life Ins.

Quote:
Originally Posted by BUM
This is a question for your agent to answer. Personally, since ER I've cashed in. I told* DW I'd rather spend the money with her now than get a check after one of us dies.

Another option is to ignore it and its cash value will pay the premiums for you. Regardless you paid for it and likely needed the coverage when you were younger. Now you probably don't. The final choice is to have the death benefit go to the beneficiary or take whatever cash is available and run.

BUM

I wish now I had never owned any life insurance other than some
term coverage when my kids were small. And, that's not because I didn't
die Unless you have helpless people depending on you, I don't see a
big need. However, whole life has helped me out. When I bought my last
company, the founders had policies paid by the corp. I was thinking of cashing them in until it occurred to me that they were both pretty old.
I left them in place (they were paid up). Both men died within a year.
I was sorry to see them go but it was nice to get those big checks.

JG
__________________
MRGALT2U is offline   Reply With Quote
Re: Whole Life Ins.
Old 06-06-2005, 08:35 AM   #4
Moderator Emeritus
Martha's Avatar
 
Join Date: Feb 2004
Location: minnesota
Posts: 13,212
Re: Whole Life Ins.

On of the stupidest investments I ever made was being convinced when I started my job to buy some life insurance in my retirement plan. Finally was able to buy the policy from the plan. Now not sure what to do with it. We are still vacillating on whether to just cash it out.
__________________
.


No more lawyer stuff, no more political stuff, so no more CYA

Martha is offline   Reply With Quote
Re: Whole Life Ins.
Old 06-06-2005, 12:14 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Re: Whole Life Ins.

73, what it makes sense to do depends on your situation and the specific policy. Do you still need life insurance any more? If not, which company is the policy with and what is the effective return (simply, Dec. 31 cash value minus Jan 1 value, assuming no premiums paid)? If you were to take a loan against the policy, what would they charge you? What would your after-tax cash out be if you surrendered vs. current policy cash value?
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Re: Whole Life Ins.
Old 06-06-2005, 12:23 PM   #6
Thinks s/he gets paid by the post
73ss454's Avatar
 
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,378
Re: Whole Life Ins.

Brewer,
It's with Mass Mutual.
Not sure of the loan rates, but I don't need anymore loans.
Trying to get rid of them all for ER.* I'm 56 and want to retire at 57. Next April if all goes well.
The kids are gone and doing well.
The cash value seems to be going up about 7% a year. Not a bad
return at this point.
Do the companies raise the cash value as you age to hope that you cash it in?
I was thinking of keeping it until I needed the money or the family would get the 500K when I depart.
Martha,
I know now that this was not the brightest purchase I've ever made. But it's paid now and I want to do the right thing at this point. Just not sure what that is.
Thanks,
JOE
__________________
Work is something you do to get enough $ so you don't have to....Me.
73ss454 is offline   Reply With Quote
Re: Whole Life Ins.
Old 06-06-2005, 12:43 PM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Re: Whole Life Ins.

Quote:
Originally Posted by 73ss454
Brewer,
It's with Mass Mutual.
Not sure of the loan rates, but I don't need anymore loans.
Trying to get rid of them all for ER.
The cash value seems to be going up about 7% a year. Not a bad
return at this point.
Do the companies raise the cash value as you age to hope that you cash it in?
I was thinking of keeping it until I needed the money or the family would get the 500K when I depart.
Thanks,
JOE
Again, do you still need life insurance? If you do, just keep it.

If you do not, you have a policy with a good, well-managed company that treats policyholders well. Does the 7% increase with or without any premiums you paid? If it doesn't include premiums paid, that's a pretty decent return on a low-risk investment. In that case, I would probably keep the policy, but re-visit the decision once a year.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Re: Whole Life Ins.
Old 06-12-2005, 09:57 AM   #8
Thinks s/he gets paid by the post
saluki9's Avatar
 
Join Date: Feb 2005
Posts: 2,032
Re: Whole Life Ins.

There are few things that are as a good deal as a paid up whole life policy. Of course getting to the paid up state is very expensive.

The 7% return is pretty common for paid up whole life. (no premiums) No way I would cash it in, you've paid in for the most expensive part, and now you're going to give up the gravy?


__________________
saluki9 is offline   Reply With Quote
Re: Whole Life Ins.
Old 06-12-2005, 07:24 PM   #9
Thinks s/he gets paid by the post
73ss454's Avatar
 
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,378
Re: Whole Life Ins.

Saluki9
Thanks for the reply.
I sort of felt the same way as you but just needed to here it from someone else.
I think just holding onto it untill I need it would be the best way to go.
The cash value seems to be growing at a good pace at this point. The company did say that I may have to put some other monies into it at some point but they are not sure. Depends on what the policy throws off each year.
Thanks,
JOE
__________________

__________________
Work is something you do to get enough $ so you don't have to....Me.
73ss454 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
What to do when you can't get life insurance? LRAO FIRE and Money 8 09-21-2006 11:10 AM
term life recommendations Rich_by_the_Bay FIRE and Money 9 08-24-2006 09:50 AM
Life Insurance - necessary or necessary evil? Rich_by_the_Bay FIRE and Money 64 03-10-2006 12:08 PM
Life insurance change ferco Other topics 6 02-14-2006 12:09 PM
What to do with Met Life Ins. Policy Adventuregirl FIRE and Money 6 02-04-2006 06:50 AM

 

 
All times are GMT -6. The time now is 01:08 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.