- April 28, 2024
- Posted by: legaleseblogger
- Category: Related News
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Considering Cancelling Whole Life Insurance Policy
I was convinced to convert $375k of my term life insurance into whole life back in August. The annual premium for just the whole portion is $7k. The whole life policy is Whole Life Plus 65. So far, I have already paid roughly $5-6k in premiums, but I am contemplating cancelling the policy and accepting the loss as a sunk cost resulting from a bad decision.
If I cancel the whole life policy, my term life insurance would cost around $1k annually. Currently, both term and whole life policies cost me about $670 a month. If I cancel the whole life policy, my monthly premium would drop to $80.
My wife recently left her job to stay at home with our son, and we are expecting another child this year. Therefore, I am considering having the extra monthly cash cushion or investing it, rather than keeping a policy that I may not see the benefits of for years to come.
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If I decide to keep the policy, it essentially acts as a high-yield savings account, ensuring that I will have saved $375k by the time I reach 65 (although I would only have access to the cash value at that time). However, I am unsure if the benefits of keeping the policy outweigh the immediate financial relief of cancelling it.
What are your thoughts? Should I cut my losses and cancel the whole life policy, or should I continue paying the premiums for the long-term benefit it may provide?
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****** just grabbed a
Whole life bad: https://www.whitecoatinvestor.com/debunking-the-myths-of-whole-life-insurance/. https://www.whitecoatinvestor.com/what-you-need-to-know-about-whole-life-insurance/
Yes you should probably cancel it unless you’re quite quite rich (in which case you probably wouldn’t be here)
Absolutely cancel it and take the loss. I had to do it, and it feels great. There are very few instances when whole life makes sense and it doesn’t seem like your situation applies. I’m guessing this is Northwestern Mutual? As someone that worked there for a very brief period, I’ve been through their sales training and I can promise you they are not acting in your best interest. They are trained to sell whole life to everyone, all the time…no matter the situation. Fine to keep your term w/ them, but I would definitely get rid of whole life and move any investments from them also (they charge super high fees for minimal value on the investment side too).
Get out of it and go get term life, invest savings in normal accounts. You learned the lesson quickly at least!
I’d get term to replace it before you cancel, just in case something turns up during your checkups. Go with select quote policy genius, not whoever you bought whole life from.
The math on those never makes sense. Pay your stupid tax and move on. Once you have a chunk of assets fund your own policy by have different investments
Yeah man.. this gets posted here a lot. Go back and read and you’ll see the general consensus
Cancel whole life. The only person who really benefits from whole life is your insurance agent.
Sunk cost based on bad decision, you got it.
Get out as early as you can.
Depends. How old are you now? Will you still want or need an insurance policy with this coverage after age 65?
Term insurance premiums are comparatively lower now but it will increase as you age. So by 65, your premiums can be more than $7K per year.