To preface this, I am not a fan of whole life insurance policies and I know the math tells me to cash out and reinvest.
TLDR: Father started an inexpensive whole life policy on me before I was born and just now informed me of this and wants me to take over the payments. Should I just do it to make him happy?
So yesterday while visiting with my parents, my father informed me that he opened an inexpensive whole life insurance policy on me back before I was even born. I have not looked yet into the exact numbers as this was more of a casual conversation with him but he seems to think the monthly cost is $16 and the payout is $30,000. I don’t know a ton about whole life but he said he held off on telling me earlier because I would have “cashed it out” for roughly $6,000.
He only told me now because for the past year or so I have significantly changed my financial maturity and he feels he can trust me to keep this policy going.
I was sort of thinking out loud in front of him and saying that if I cashed it out and reinvested the $6,000 in an index fund and contribute $200 per year to this investment (which would be the same amount I’d be paying to keep the policy), it would most likely grow more than the $30,000 payout in the whole life policy. He seemed to get upset that I was considering “throwing away” the 32 years of thoughtful investments for me.
I am 100% extremely grateful to him doing this and never expect financial help from my parents. Just want some opinions for others on what you all would do or recommend. Also, if these policy numbers don’t make sense, it’s probably because they are wrong. I have yet to dig into this policy at all.
Thank you.
Submitted November 22, 2018 at 10:13AM by eaglesf4n86 https://ift.tt/2DSAf1a
