How Do I Close My Whole Life Insurance Policy?
Dave enlightens his listeners on why they should never go for whole life insurance.
QUESTION: Listener on Twitter wants to know if they should close their whole life insurance policy or just stop contributing. Dave has a swift and sure answer.
Dave's ANSWER: You should close it once you have term life insurance in place. You should have life insurance that is 15- to 20-year level term, about 10 to 12 times your income. If you make $40,000 a year, you should have $400,000 to $500,000 in term life insurance.
It barely costs anything. It costs about one twentieth of what whole life costs. You know the money that is in your whole life policy right now, known as the savings plan or the cash value? When you die, you lose that money. They only pay the face amount of the policy. Get the money out of there and close that policy.
But don't do that until you have the proper amount of term life insurance in place. And don't do whole life insurance ever. There is never a good time to be saving money inside one of these rip-off whole life, cash value insurance plans. They are bad plans.