Elk Grove, CA · Member since 2016 · 6 posts · 2 votes
I have a custom whole life policy with NY Life. There is approx $50,000.00 in Net cash value. I would like to start investing that money in real estate deals. Should I close my policy and cash out, take the money and start investing??? or Borrow against the policy and pay interest back to my self while still paying the monthly premium which is around $1000 to $1200 a month?? Please let me know what you think. Thank you
Lender · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
10y
What's your age? What other insurance go you have ? What other assets go you have ? What was the intended purposes of having the life insurance to begin with? Are you married ? Are you debt free ? Children? Ages ? I can think of 5-8 more questions I would want the answers to before I made a recommendation to you.
I have other term and if I canceled the whole life I would then get more term to make up the difference.
I have a pension through work
Intended purpose was to have another stream of income for retirement to supplement my pension. We purchased the policy because we though it was the right thing to do. But looking back don't think I would have went that route. We have been paying into it for 6 years now.
I am married with 2 small children. Wife has a great job with a 401k
Financial Advisor · Boynton Beach, FL · Member since 2015 · 833 posts · 798 votes
10y
Never, ever surrender a whole life policy. You must not realize what a powerful tool you have for real estate investing.
You are not borrowing from your cash value and paying the money back to yourself. When you take a policy loan, you are borrowing AGAINST your cash value. NY Life is giving you a loan of THEIR money. Your cash value continues to earn dividends AND you get to put the money to work in real estate.