Throwaway account. Sorry, it's a bit of a mess.
For some background: I was taken along to the insurance office and basically told to buy it. I have historically been poor at setting boundaries with my parents (abusive environment at home). I was massively uncomfortable but they guilted me very hard and told me that they were just looking out for me. I believe they genuinely thought they were helping, but I was uncomfortable with it to start, and now I am really questioning whether I should/can bail.
As I understand the policy, they are the owners, I am the insured, and they are the beneficiaries (I only really got this out of them because they demanded my SIN to change it so that I was an owner as well as the insured -- which they explained very shittily and I only semi-understood it because my best friend helped me figure things out after I tearfully consulted her. I never gave them my SIN but they are my parents and I think they may have dug it up anyway and used it).
The policy requires a $3000 payment each year for ~20 years. I don't really know anything about it beyond that. They paid the first year. Now, they insist I need to pay for it, and they take money out of my joint account with them (that they solely control -- I know this is not good. I have my own personal account set up at another bank that all my paycheques go into. As far as I am concerned, the other one might as well not exist).
They wanted to buy the insurance as an investment for me. Their reasoning is that it would be paid off by the time I am well into my career, and if I waited and then took money from it, the cash would be "tax-free". They are very tax-averse (e.g. they deferred land tax payments on the house, so as I understand it, once they both pass and I inherit the house, I will first have to actually pay back the government all the deferred tax).
I have just graduated university this year. My father recently passed so now it is just me and my mum. I have just started working. I no longer live at home. I think taxes are pretty great. I like having government services and investing in my society. I'm okay with it.
What I am struggling with is needing to put aside $3000 a year, or otherwise being guilted/badgered/nagged to cough up the money/having them hold it over me. It's just another thing my mother pressures me with and I am sick of hearing about it (AND the new policy she wants to buy using my name! Because I'm cheaper to insure. She insists she would pay for it all and that she would leave me enough money to pay for it if she passes -- but then why not just leave me the money without forcing me to put it in an insurance policy?). $3000 is, I think, a ridiculous amount of money to need to put aside when I don't even have enough to fill up my TFSA quota. Even if they haven't forced me to cut a cheque from my personal account to pay for it yet, I'm getting anxious just thinking about needing to put aside such a huge chunk of money every year when it could be going towards getting a car, or rent, or my TFSA, or hell just beefing up the emergency fund. Plus I am intending to continue with graduate studies in the next couple years, so I am really hoping to save up as much as I can for that.
Reddit, is there any advantage to "investing" using a life insurance policy like this rather than investing it some other way? Is it worth $3000/yr? In the future it will be a source of money, sure, but I feel like I would much rather have that $3000 to use now. But at this point we've already thrown $9000 into it and I don't know how much we'd be able to get back.
To be clear, I don't think my parents were trying to screw me over or anything. My mom is taking care of my student loan debt for me (around 20k). This wasn't malicious, even if they were really pushy and turned kind of nasty when I wasn't enthusiastic, and I think they did/she does have my best interests at heart. I am just starting to question whether this was an actual competent investment move. And if not, how do I start bailing out of it.
I also know I have to work on asserting myself as an adult. But at the moment I am just asking about how to handle the financial side of things.
Sorry for the wall of text.
TL;DR Was pressured into agreeing to get a life insurance policy as "investment". Unsure if I am the owner or if only my mum is owner, but I am definitely the insured. Mother is the beneficiary. It is $3000 a year and I am on the hook for paying it. I don't like it because I think $3000 is a lot at my current life stage and I want to use it to make my life better right now (save for car, graduate school, emergency fund) rather than wait 20 years for it to pay off. Unsure if this is wise, but if it isn't would like advice on how to bail.
Submitted October 27, 2017 at 02:28PM by throwawaylifeins http://ift.tt/2zchLpT
