Before you panic, please know that I'm with you: I do not like Whole Life Insurance and would never purchase such a policy on my own.
However, here's my situation:
In short, my parents in law had purchased a Whole Life "50" policy through AXA, many years ago, to insure my wife. She was 7 back then, I believe, so the premiums were extremely low. Don't ask me why they decided to do this when she was so young. The policy, along with the requisite bunch of lies and false expectations, was sold to them by somebody who they claim was a "friend of the family".
My mother in law recently decided to transfer the ownership of the policy to me. I am now the owner and beneficiary of the policy, and here are the numbers as they stand now:
- Face Amount was $100K
- Current Death Benefit is at $250K
- Current Cash Value / Net Cash Surrender Value is only $35K
- Current yearly dividends are about $500 a year.
- Premium cost is roughly $600 a year.
The first thing I did after becoming the owner of the policy was to change the dividend re-investment option so that they can pay for the policy's premium. In other words, the policy is basically costing me a little less than $100 (one HUNDRED dollars) a year.
The way I see it, in this specific situation somebody else did the heavy lifting for me throughout the last 30 years or so, (my poor parents in law, in this case) and now the policy is set on "auto-pilot" and costing me almost nothing. If I cancel it, we would only get $35K, and the real benefits would only kick in only after death, so obviously that's not something I am even contemplating nor looking forward to. Luckily, we do not need the $35K, but I also have no way to have an input on the policy's investment selection.
What would you do in this particular case? Does it make sense to keep the policy, specially since it only costs me $100/year, and probably next to nothing in a few short years?
Your input, ideas and feedback are greatly appreciated.
However, here's my situation:
In short, my parents in law had purchased a Whole Life "50" policy through AXA, many years ago, to insure my wife. She was 7 back then, I believe, so the premiums were extremely low. Don't ask me why they decided to do this when she was so young. The policy, along with the requisite bunch of lies and false expectations, was sold to them by somebody who they claim was a "friend of the family".
My mother in law recently decided to transfer the ownership of the policy to me. I am now the owner and beneficiary of the policy, and here are the numbers as they stand now:
- Face Amount was $100K
- Current Death Benefit is at $250K
- Current Cash Value / Net Cash Surrender Value is only $35K
- Current yearly dividends are about $500 a year.
- Premium cost is roughly $600 a year.
The first thing I did after becoming the owner of the policy was to change the dividend re-investment option so that they can pay for the policy's premium. In other words, the policy is basically costing me a little less than $100 (one HUNDRED dollars) a year.
The way I see it, in this specific situation somebody else did the heavy lifting for me throughout the last 30 years or so, (my poor parents in law, in this case) and now the policy is set on "auto-pilot" and costing me almost nothing. If I cancel it, we would only get $35K, and the real benefits would only kick in only after death, so obviously that's not something I am even contemplating nor looking forward to. Luckily, we do not need the $35K, but I also have no way to have an input on the policy's investment selection.
What would you do in this particular case? Does it make sense to keep the policy, specially since it only costs me $100/year, and probably next to nothing in a few short years?
Your input, ideas and feedback are greatly appreciated.