Please provide me some advice on what to do in this situation. Ten years ago, my spouse, who is forty years old, bought an equitable whole life policy. He now pays $200 a month for a $110,000 death benefit. After we pay into this policy for a further ten years, it becomes permanent coverage.
We are considering simply giving up and switching to term insurance in place of the surrender value, which is currently approximately $9k. Additionally, he has access to group life insurance through his job, which will cover three times his salary. Our two small children each have a full life insurance, as do I, and I will be giving ours up because I believe we have more than we require.
We emailed his financial advisor, who told him not to give up as the policy is pre-2017 Generation 2 (not sure what that actually implies). I would appreciate some advice and insight into whether or not we are approaching this correctly.
Think about the goal of insurance: to provide financial security for cherished ones. Analyze your requirements, compare the advantages and disadvantages of the present policy, and get a second opinion from a fee-only financial advisor to get objective guidance.
This policy is very restrictive. They are terrible in the initial years but excellent in the latter ones. You have lost the money you would have received from a greater early cash value had you structured the insurance in this manner. These insurance have the potential to yield excellent profits for the duration of your life. Giving up seals the defeat.
Every year, you’ll see that you’re getting a lot more than what you paid for the coverage. More tax adjustments than you would receive from any investment heavily weighted in bonds. And this cash is just as secure as a bank account.