SoaringEagle
Dryer sheet wannabe
After a year of lurking this site and increasing my knowledge, my wife and I finally fired our financial advisor of 6 years. Our entire portfolio is now safely self-managed and diversified at Fidelity with low cost index funds. Gone are the high fees and commissions. It is a humbling experience to realize that someone that you trust as an advisor and fiduciary is actually out for their own self-interest. Which brings me to the last piece of the puzzle. Our ex-CFP sold us a Eclipse Protector Indexed Universal Life Policy. I now understand that this was a bad investment and an expensive insurance policy that we don't want and don't need. Likely the most expensive lesson of my life. I'd like some insight as to how to move forward.
My wife and I have a Household income of $200,000 per year. I am 46 years old and my salary is the main source of income. My wife is 42 years old and works part time. We have $1.3m in Roth's, 401K, and brokerage accounts which is well diversified in low cost index funds. Our mortgage is paid off. We have a sufficient emergency fund in cash. We are maxing out our investments with $50K-$70K per year. We have no children nor plans for any dependents of any kind. We live off of a budget of less than $75,000 per year. Hope to retire early in 12 years at 58 years old.
The policy is a Eclipse Protector Indexed Unviversal Life Policy. Face amount is $500,000. Premium is $5000 per year. I have been paying in for exactly 5 years. Current accumulation value is $22,000. Current surrender value is $12,000. Surrender charge today is $10,000. Surrender charge in 4 years from today is $6000. Surrender charge in 6 years from today is $4000. The fees are very high. The returns are capped.
From everything that I have gathered, there is absolutely no reason that I should have been sold this Eclipse Protector Indexed Universal Life Policy other than to line my ex-CFP pockets. Please offer some insight on these options or offer new ideas.
1) Surrender the policy now and take the huge hit. Take the $5000 per year that I was paying on premiums and invest that into a three fund portfolio of index funds. Purchase a term policy.
2) Continue to pay the $5000 per year on this policy for a period of time and then when the accumulation value increases and the surrender charge decreases to a point in which it makes more sense to surrender. This seems like throwing good money after bad. I have not been able to make the math work out on this option but maybe someone can enlighten me.
3) Do a 1035 Exchange to an annuity. Either keep the annuity for a period of time or surrender the annuity and claim the loss.
4) Keep the Universal policy and keep paying the $5000 per year
I would appreciate any insight or suggestions on how to best move forward with or without this Universal Life Policy.
My wife and I have a Household income of $200,000 per year. I am 46 years old and my salary is the main source of income. My wife is 42 years old and works part time. We have $1.3m in Roth's, 401K, and brokerage accounts which is well diversified in low cost index funds. Our mortgage is paid off. We have a sufficient emergency fund in cash. We are maxing out our investments with $50K-$70K per year. We have no children nor plans for any dependents of any kind. We live off of a budget of less than $75,000 per year. Hope to retire early in 12 years at 58 years old.
The policy is a Eclipse Protector Indexed Unviversal Life Policy. Face amount is $500,000. Premium is $5000 per year. I have been paying in for exactly 5 years. Current accumulation value is $22,000. Current surrender value is $12,000. Surrender charge today is $10,000. Surrender charge in 4 years from today is $6000. Surrender charge in 6 years from today is $4000. The fees are very high. The returns are capped.
From everything that I have gathered, there is absolutely no reason that I should have been sold this Eclipse Protector Indexed Universal Life Policy other than to line my ex-CFP pockets. Please offer some insight on these options or offer new ideas.
1) Surrender the policy now and take the huge hit. Take the $5000 per year that I was paying on premiums and invest that into a three fund portfolio of index funds. Purchase a term policy.
2) Continue to pay the $5000 per year on this policy for a period of time and then when the accumulation value increases and the surrender charge decreases to a point in which it makes more sense to surrender. This seems like throwing good money after bad. I have not been able to make the math work out on this option but maybe someone can enlighten me.
3) Do a 1035 Exchange to an annuity. Either keep the annuity for a period of time or surrender the annuity and claim the loss.
4) Keep the Universal policy and keep paying the $5000 per year
I would appreciate any insight or suggestions on how to best move forward with or without this Universal Life Policy.