I have an AXA Equitable life insurance policy (modified premium variable whole life) with a face value of $100,000 and a net cash surrender value of $61,000. I am 66 years old & in good health. No dependents. Does it make sense to keep this policy or cash it in and invest the money into something else? My cost basis for this policy was $35,000 and I have owned it for 20 years. SB
life) with a face value of $100,000 and a net cash surrender value of $61,000. I am 66 years old & in good health. No dependents. Does it make sense to keep this policy or cash it in and invest the money into something else? My cost basis for this policy was $35,000 and I have owned it for 20 years.
If you are healthy, check to see if you can convert it to an immediate annuity.
Or, if you are not yet taking SS, live off the policy to get higher future SS benefits.
Seeing as you have no need for life insurance, my advice is to surrender the policy. The only down side is that doing so will add $26k to your taxable income. Depending on your individual circumstances, you might end up owing quite a bit of taxes on that income. Surrendering the policy could push you in to a higher tax bracket. But there's also the danger that the increase in your taxable income will increase the taxable portion of your Social Security benefits. Converting the policy to an annuity (as Ron suggested) can help alleviate the tax burden.
--Bill
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