Reply to Would you hold onto 100k whole life policy?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]Hold it. Insurance policies are outside your estate and not subject to tax, so it is a nice inheritance.[/quote]

In addition to this, most of the money in the policy will be considered tax free income after a certain point. great to have with retirement staring at you in the face. [/quote]

This is a good example of why you need to be careful getting financial advice on these boards.  It is not at all true that "insurance policies are outside your estate". It is possible to set up an irrevocable trust to hold your life insurance policy, but that sounds like it would be a waste of money in your circumstances.  It's also not clear you care if it's outside your estate, since almost everyone can avoid estate tax simply by using their lifetime exemption of $5.3 million.

I would probably drop it because you can't rely on what the insurance co. is promising as to whether the dividends will continue to cover the cost of the insurance, and the more money you sink into the policy the more you will feel you should keep it.[/quote]

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