A little financial advice please

[Soybomb]

So I have a question that I haven't been able to find much on. I have a few life insurance policies with cash value. I'm in college and need money, is it better to to use them up before I take out more loans, or is the cash value so low that it would be dumb to do so. For example I have a limited pay whole life insurance policy with Prudential, net death benifit is 8,322.44 and its cash value is 1,245.72 I hate to pull the cash since its worth so little compared to its pay out value, but is it really that bad to do?

 

[Yossarian]

Does the death benefit increase as your pay increases? I wouldn't touch it. A few years of financial hardship in college is normal (at least it was for me), then once you get a good job you can pay off all that stuff and still have the insurance policies for when you get married and/or have kids.

 

[kranky]

I'd do it. You don't need life insurance now, since you have no dependents and no one is relying on your income. When you do need insurance down the road, you can get a term policy for cheap.

There is a risk that you may become uninsurable for some reason (health-related), but even so the policy you have now is very small.

 

[Soybomb]

Originally posted by: kranky
I'd do it. You don't need life insurance now, since you have no dependents and no one is relying on your income. When you do need insurance down the road, you can get a term policy for cheap.

There is a risk that you may become uninsurable for some reason (health-related), but even so the policy you have now is very small.

That was sort of the lines I was thinking of, when I really need to have a policy I'd be able to afford it.

PipBoy: yes the benifits do grow, but a payment is made for the insurance each month as well, so that cost is something to factor in.

 

[FoBoT]

get the $

when you get a wife/kids, get Term life insurance , don't ever get "whole" life insurance again, it is better to put the difference (the difference in price between term and whole life ) into your 401(k) or IRA and invest it yourself

 

[Soybomb]

Originally posted by: FoBoT
get the $

when you get a wife/kids, get Term life insurance , don't ever get "whole" life insurance again, it is better to put the difference (the difference in price between term and whole life ) into your 401(k) or IRA and invest it yourself

I assure you that when the decision was made I was too young to have a say in it

 

[RossMAN]

Originally posted by: kranky
I'd do it. You don't need life insurance now, since you have no dependents and no one is relying on your income. When you do need insurance down the road, you can get a term policy for cheap.

There is a risk that you may become uninsurable for some reason (health-related), but even so the policy you have now is very small.

I concur.

 

[Soybomb]

Thanks for the advice, I've called and asked them to send me the paper work.

One of the places I had a 10k policy that pays 460 on surrender. Is this low, the other high, or just all totally dependant on when you get it and what the policy says?

 

[CPA]

Originally posted by: kranky
I'd do it. You don't need life insurance now, since you have no dependents and no one is relying on your income. When you do need insurance down the road, you can get a term policy for cheap.

There is a risk that you may become uninsurable for some reason (health-related), but even so the policy you have now is very small.

get the $

when you get a wife/kids, get Term life insurance , don't ever get "whole" life insurance again, it is better to put the difference (the difference in price between term and whole life ) into your 401(k) or IRA and invest it yourself

Both very good points.