I bought a whole life insurance policy in May of 2019, but I am not wealthy and don’t expect to be. I recognize this was not a wise decision. The policy has a $201 monthly premium with a death benefit of $250,000.
To date, I’ve made 55 monthly premium payments totaling $11,055. However, the cash value of the policy is only about $3,650. I intend to open a new term policy with a higher death benefit and much lower monthly premiums. I’m a 31-year-old healthy male (non-smoker). Once I have the new term policy in place, I plan to cancel the whole life insurance policy, take the cash value, and redirect my contributions to my Roth IRA.
Is this a sound plan? I regret not realizing sooner that I could have been investing this money elsewhere, as whole life insurance is a poor investment for someone in the middle class.
I’m eager to learn more about finances and self-improvement, so any advice would be greatly appreciated.