Hi Money Minder,
I’ve got this policy that my aunt set up for me when I was born, and my mom handed it over to me in 2017. She just said to hold onto it because they don’t make them like that anymore. It’s now worth over $10,000 with an annual premium of a bit over $200. I didn’t pay much attention to it until recently when I started getting more into money stuff.
The death benefit is $60,000, and the investment options are split between three portfolios. The cash value has grown from $3878 to $10,024 since 2017. They changed up the investments last year, so who knows what might happen next. Do you think I should keep it?
I checked, and there shouldn’t be any fee if I cash out – no surrender charge and $0 for IRS reportable interest. What’s your take on this?
Thanks for your help!
Retirement Ready
Farewell
Response from THE MONEY MINDER:
Hello There,
It’s commendable that you are taking the initiative to become more financially literate and to look into this policy that your aunt opened for you. First and foremost, congratulations on the growth of the cash value of the policy since you took control in 2017. It’s clear that you have a valuable asset in hand.
Considering the facts you’ve shared, including the annual premium, cash value, and investment options of the policy, it seems like this policy holds potential for further growth. The death benefit of $60,000 also adds to its value.
Given that there are no surrender charges and no IRS reportable interest, you have the flexibility to decide whether to keep or cash out the policy. To make an informed decision, it’s essential to consider your current financial situation, future goals, and risk tolerance. You may also want to review the performance of the new investment options and assess whether they align with your financial objectives.
As a practical approach, you could consult with a financial advisor to gain a deeper understanding of the policy, its investment options, and how it fits into your overall financial plan. They can provide personalized advice based on your unique circumstances and guide you on the best course of action.
In the end, the decision to keep or cash out the policy should be based on a careful evaluation of its value, your financial goals, and the potential growth opportunities it offers. Remember, it’s essential to make an informed choice that aligns with your financial well-being.
If you have any more questions or need further guidance, feel free to reach out. Remember, THE MONEY MINDER is here to support you on your journey towards financial empowerment.
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