@amberb My wife’s digging out the ledger for it. I’m going to review when I get home to know. There was a point where I would lose money up to a certain point.
@nicolewilliams Plus if you are 7 years into a 15/20 year programs you likely won’t be able to touch the premiums you are paying. Industry as a whole experienced a decent rate increase for these types of programs and yours is locked in at what you are currently paying.
@amberb Yes it can be stopped at any time. There is a financial loss to a certain point of the program. Meaning I’ve paid more into then it’s cash value is
@amberb If I fund the whole policy then it would be matched to the premiums. But the policy has a cash value to close the policy. For example. After paying into the policy for 7 years, if I should decide to cancel it has a cash value of 67,000, even though I’ve paid 84k into it, that’s an example and not exact numbers. But it does carry a cash value
@nicolewilliams I’m familiar. The gap will close every year and catch up around the time that the policy is paid up. Long term they are good programs but early cancellation typically results in a loss.
@amberb Correct, I just have to look at the paperwork when I get home to know when it will balance out, I think it’s before full term but can’t remember.
@nicolewilliams Are you saving at least as much as the premiums in tax advantage’s accounts? Ie, IRAs and 401k? If not, it’s probably not worth foregoing those contributions to continue the insurance. Definitely get an in force illustration before making any decision. You want to see your current projected rate of return on current balance and future premiums
@zaverax I have a complete ledger at home of the premiums and growth as well as withdrawal amounts each year.
And no I’m not invested anywhere else. I’m trying to get better at this. But I have to learn. I can’t watch the market daily so I need a solid investor that I trust.
@nicolewilliams IMO, you've gotten some good information. I would add please do not get into fear of missing out (FOMO) as the reason for making a change. Do you have an emergency fund that covers 6 months of your bills? If not, then it's typically advisable to direct your extra money to get that set up. If you do, great you're ahead of the game more than you think. Are you eligible to open Roth IRA's, 2024 income max for joint filing is $240k. Set up a Roth for you and your wife and put the most you can in with the goal to be maxing them out. Finally, if you would need additional Insurance then look at term.
@ska88 Not knowing the cash value, the OP or anybody certainly could use a life insurance policy cash value as an emergency fund. Perhaps it is a matter of semantics, however to me there is a difference between an emergency fund and a funds for a catastrophic event. Personally, I wouldn't just like I wouldn't consider a 401k or IRA as an emergency fund. My emergency fund is immediately liquid, doesn't have a penalty for withdrawing money, and "interest" I'm charged to pay it back, restore, is effectively whatever the account was paying, which is less than a policy loan will charge or the loss in the 401k value of interest crediting. Different way to look at it. Just IMO if the policy is intended to provide tax free income in retirement then it should be catastrophic event and not emergency fund.
