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re: Wife’s single premium whole life insurance from the 80s- wwyd
Posted on 5/23/23 at 4:17 pm to OysterPoBoy
Posted on 5/23/23 at 4:17 pm to OysterPoBoy
quote:
I mean, you could lose it.
Loan doesn't have to be paid back.
Now, if you're being sarcastic, yes, he could lose the cash in some poor investment, and his policy would lose value. Compare to cash out and lose it; it's all gone.
2
Posted on 5/23/23 at 4:27 pm to Jag_Warrior
quote:
What does he have to do with the situation or her financial decisions? I don’t think that she should, but what’s his involvement?
Could be very possible he is still the owner of the policy.
Posted on 5/23/23 at 4:51 pm to BestBanker
quote:
Loan doesn't have to be paid back.
Well I didn’t know that part.
Posted on 5/23/23 at 5:54 pm to OysterPoBoy
You do not have to pay it back. It will still accrue loan interest(varies by company usually 6 to 8%). When the amount owed surpasses the cash value, the policy will lapse. If you want the death benefit, do not let this happen. An example, policy owner has a hypothetical policy at $100000. He borrows $10000 against the cash value but never pays anything on the loan. Down the road loan is now $15000 and the insured passes away. The company will still pay the death benefit minus the loan, in this case $85000. Assumed that he maintained the policy and did not let it lapse.
Posted on 5/23/23 at 6:09 pm to GoCrazyAuburn
quote:
Could be very possible he is still the owner of the policy.
I thought that too, then went back and re-read his post:
quote:
My wife’s grand parents bought her a single premium whole life insurance policy
Not a big deal… just wondering why/how a parent would be telling a 30-something what they can and can’t do financially.
Posted on 5/23/23 at 6:29 pm to Jag_Warrior
Who knows. Grandparents could have bought it and made dad the owner of the policy. Also said they are 30’s and $1M policy doesn’t really move the needle, so very possible there is a good bit more to the situation than just the policy.
This post was edited on 5/23/23 at 6:34 pm
Posted on 5/23/23 at 6:31 pm to dwr353
Bingo. You can also change your dividends to go towards repaying loan and depending on rates like you said, could cover all of that. The cash value still grows based on the policy value, not minus whatever you’ve taken out. There is a ton of flexibility you have around using the cash value. The whole “self banking” mantra and stuff. In a situation like
This where the policy is already paid off, the options are pretty cool.
This where the policy is already paid off, the options are pretty cool.
This post was edited on 5/23/23 at 6:41 pm
Posted on 5/23/23 at 9:07 pm to BestBanker
quote:
I mean, you could lose it.
Loan doesn't have to be paid back.
But you still would lose 400K and the face amount would be reduced.
Some good advice in this thread. I would pay back the loan if you do borrow from it.
You could sit back and let the cash accumulate and use the cash value as a buffer asset in retirement or to fund Long Term Care needs. Long term care is something you may not be thinking about now but you will when you hit your 60s. You could also create your own Pension with the policy when you retire.
This post was edited on 5/23/23 at 9:10 pm
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