Hi all,
My dad has a MetLife life insurance policy that he would like to cash out and just invest instead. He purchased this policy over 20 years ago when I was born, and I am no longer dependent on his income.
I just wanted to know if it would be a smart move to cash out this policy and just invest (VTSAX/VTI for example) instead. And what would the tax implications be?
Policy Info (Amounts Altered for this Post):
Net Gain Amount: $3,600
Surrender Penalty: N/A
Net Cash Amount Available: $22,000
Cash Value - Base: $7,500
Death Benefit Amount: $100,000
Paid-Up Additional Insurance Cash Value: $14,500
Paid-Up Additional Insurance: $0
Am I correct to believe that
- $3,600 will be the taxable gain (taxed at ordinary income rate)
- $22,000 would be the amount my parents receive upon cash out
Thanks in advance!
Submitted January 04, 2021 at 09:10PM by pokeagogo https://ift.tt/3pN7R4j
