My financial advisor recommended my wife and I both get insurance when we were married back in 2015. One of his recommendations was a whole life policy in her name that would also be an investment vehicle for us. I was young and trusting then and did not do my due diligence and research on the product. Currently, our situation is - stay at home wife (31 who this account is tied to), myself 32 with term life insurance and two kids under 3. I contribute a total with match of 15% into my 401k, we have two rollover IRAs, a one year max value Roth IRA and an conservative investment based savings account through my financial advisor. We have 6+ months rainy day and cash flow covered in our personal savings and checking accounts.
We are now 6 years into a 40+ year investment commitment and I do not believe whole life is or was the best option for us. Essentially, view attached term sheet, we will see a guaranteed 4% return on the cash value of this investment over 40 years. Depending on annual dividend payments this amount could increase. We are contributing $5,700 into this account annually since we were targeting this account as one of our long term investment accounts to utilize during retirement. I believe that the market through index funds could be similarly as safe over a 40+ year investment cycle while accumulating much great value.
Currently, our surrender value is $22,000 with contributions to date being $32,000. I have expressed my disappointment and new lack of trust in my fee based financial advisor and am meeting with him Monday to discuss this account. My understanding is that I have a few options. Option 1 is to do nothing and continue to invest in this account as planned. Option 2 is to stop making contributions and let this account to continue to grow with the money invested so far. Option 3 is to surrender the account and pull the cash value of $22,000 out. With that I would buy term on my wife and invest this money into a more accumulation based account. What is PF's advice on overall strategy and what to do next?
Submitted October 02, 2022 at 06:44AM by hoodjigga https://ift.tt/tcfU1gC
