Whole Life Policy--Keep It or Surrender It?

I'm sure this question has been asked many times, so please bear with me. Many years ago (I'm 36 now, still on active duty in the Army), USPA&IRA duped me into buying whole life insurance. I now have two policies with The Old Line Life Insurance Company (now American General).

I am in year 14 of my $100,000 whole life policy, which costs me $67.50 per month. To date, I have paid $11,610 in premiums. If I surrender the policy now, I can take the $3600 cash value, trade it for a paid up $37,200 policy, or convert it to a $100,000 17 year term policy.

I am in year 7 of my $25,000 whole life policy, which costs me $16.19 per month. To date, I have paid $1,409 in premiums. If I surrender the policy now, I can take the $600 cash value, trade it for a paid up $4425 policy, or convert it to a $25,000 10 year term policy.

Is there any reason why I should continue to sink my money into these expensive whole life policies? I have plenty of term insurance, no health problems at this time, and am generally in pretty good financial shape all the way around. I know whole life is not intended to be an investment vehicle. However, it is quite clear that in the long run I can do much better if I use this money elsewhere. But I'm left wondering if I'm not seeing the bigger picture. Are there other benefits to whole life that I'm not considering?

I'd greatly appreciate any advice, as opinions on whole life insurance seem to vary greatly. Thanks in advance!

I'm sure this question has been asked many times, so please bear with me. Many years ago (I'm 36 now, still on active duty in the Army), USPA&IRA duped me into buying whole life insurance. I now have two policies with The Old Line Life Insurance Company (now American General).

I am in year 14 of my $100,000 whole life policy, which costs me $67.50 per month. To date, I have paid $11,610 in premiums. If I surrender the policy now, I can take the $3600 cash value, trade it for a paid up $37,200 policy, or convert it to a $100,000 17 year term policy.

I am in year 7 of my $25,000 whole life policy, which costs me $16.19 per month. To date, I have paid $1,409 in premiums. If I surrender the policy now, I can take the $600 cash value, trade it for a paid up $4425 policy, or convert it to a $25,000 10 year term policy.

Is there any reason why I should continue to sink my money into these expensive whole life policies? I have plenty of term insurance, no health problems at this time, and am generally in pretty good financial shape all the way around. I know whole life is not intended to be an investment vehicle. However, it is quite clear that in the long run I can do much better if I use this money elsewhere. But I'm left wondering if I'm not seeing the bigger picture. Are there other benefits to whole life that I'm not considering?

I'd greatly appreciate any advice, as opinions on whole life insurance seem to vary greatly. Thanks in advance!
Something sounds wrong with those policies, and they need to be scrapped if they really are performing as you've described. I don't know that you're describing them correctly.

I would suggest that you call American General and request in-force illustrations for both policies under current assumptions. Then go pay $100-$300 to a Life & Health Insurance Counselor to help you make the right decision. If you live in Texas, I could actually do this for you if I hadn't met you on a board like this.

If it's really the piece of crap you're saying it is, then a good Counselor won't need to spend more than 15 minutes looking over those illustrations and your policies to identify as much and (likely) recommend that you dump it.

But surrendering a life policy is a complicated thing. For instance, you might want to do your annual physical before you make that decision. If it turns out you've got a disease or something, then while you might not necessarily need the death benefit . . . you might be surprised to know that you could actually sell the policy for much more than it's cash value, depending on how serious is your condition. It sounds kind of "gross" (and there are a lot of shady dudes in that business - be careful) but it's real and it's legal.

Good luck. Please report back.