I have a whole life policy. Should I cash it in and get the cash value or keep it? It's $150 a year for $12K.

Had the policy for 20 years. I have a 30-year term life insurance policy and life and accidental death insurance through my employer.

I'm always amazed reading answers from people who have no idea what they're talking about.
If you've had that policy for 20 years you'd be crazy to cash it in now. You can never again buy a policy for what you are paying now because you are 20 years older. It's good you have other insurances, but someday that term insurance is going to end. The accidental insurance is only good while you're with that employer and if you die accidentally. This policy will stay with you and the premium will never increase as long as you live.

I would keep the term policy and cash in the other one. According to Suze Orman, and I have been watching her program for quite some time on tv. She always says the only policy worth having is a Term policy and that all the others are rip offs. (she gives great advice)

Suze Orman only knows about budgeting. She knows nothing about life insurance except that she sells it. Just think, when your 30 year term policy is up you'll still have the whole life. Here is more info on the permanent life policy: http://www.findlocalinsurance.com/permlife.html

Replace it with a term policy. Cash value is nothing more than a partial return of premium, and contrary to whatver your agent might say, a cash value policy is NOT an investment. You would do much better to buy a term policy instead for far smaller premiums and invest the rest in an IRA or some such thing separate from the policy. Did you know that if you have built up a cash value in a whole life policy and die that the insurance company will pay the death benefit only and keep the cash value? Similarly, if you have a whole life policy and take out a policy loan (borrow against the cash value) and then die that the death benefit would be the face amount of the policy LESS the amount of the policy loan. If you buy a term policy instead and invest the excess into a savings such as an IRA or mutual fund and then die, you get to keep ALL of it. A whole life policy is stacked against the policyholder.

So, take out all the cash value first, then after you have it, cancel the policy - in that order. But before you do this, buy a new term policy and only then cancel the whole life policy.

They call them whole life policies because you are going to pay for it for your "whole life". Also, the cost of a whole life policy goes up every year even though the premium stays the same, that's because the actual insurance amount is equal to the face value of the policy LESS the cash value. As the cash value goes up you are paying the same amount for a steadily declining amount of insurance, since the cash value is part of the death benefit but acutally your own money. So as the cash value goes up you are gradually becoming self-insured, with the risk being shifted from the insurance company to the policyholder. These are things an insurance agent who sells whole life would NEVER tell you.

FACT: In a whole life policy, as in term insurance, the cost of the insurance goes up every year.

FACT: Whole life polices can end just like term policies. When the cash value equals the face amount of the policy, the company will cancel the policy and send you the cash value. This is another thing a whole life agent would NEVER tell you.

Buy a term policy instead and avoid all this. Whole life policies are not worth it. The sooner you can cancel the whole life policy the better off you will be.

I used to do these things and it was a real eye-opener.

Do not cash this policy in unless you desperately need the money. If you have had the policy for 20 plus years you could probably let the dividends pay the premiums for you and that would save you the $150 per year. Usually if the dividend is equal to about 75% of your premium you can do this without a problem. You will eventually die and this policy will be there for you when that happens whether you are 60 or 160. Those term policies will not be there for you to pay final expenses if you live until an old age.

Keep the policy until you successfully have found a 30 year level term policy that's not connected to the office. Then sell it (or take the accrued insurance value to date).

BTW: I'm assuming that if you leave your company (or if they have financial problems) you could lose your benefit.

Don't do anything until you have a new policy in hand!!!!!!

Ask the insurance company for an "inforce illustration" based on the current premium you are paying.

An inforce illustration will give you the information you need to make an informed decision, such as:
1. cash surrender value
2. whether the premium is sufficient to support the policy into the future.

This will tell you if the policy will be paid up soon or if you will need to put additional money into it in the future.

if you had invested $150 per year for the past 20 years at 6%, you would have $5800+/- now vs. whatever your current cash value is.

after you get this info, ask yourself what the objective of this policy was, and does it still fit your needs?

How long will it be before it's paid in full? If soon, keep it, if not $150 a year for $12,000 is not so great.

You should first ask the very basic question of "Do I need Life Insurance?" That is, if I die tomorrow, would anyone about which I care need the life insurance proceeds (spouse, SO, children, parents, charity)? Would my debts be covered? If I live another 1 year, 5 years, 10 years etc. will my survivors need life insurance proceeds?

If you answered "Yes" then proceed with the other advice - get an in force illustration and then talk to a professional.

Good Luck

Generally speaking, if you need insurance term life is preferable to whole life. It will give you much more coverage for far less money. The "investment" feature of whole life is not a good way to invest; buy term and invest the rest in a good exchange traded fund (see Vanguard ETF's, for example).

Good luck.

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