Q: I am uncertain whether to cancel or borrow from a whole life policy (with a $100,000 benefit) that is a little over 10 years old, in order to pay off credit card debt. The policy's cash value is $13,000 and the credit card debt is $10,000. I would reinvest the difference in stocks and bonds.
The bigger picture is that I want to buy a term policy for $1,000,000 because a different existing $400,000 term policy has recently run over its term and is incurring premiums that are too high.
On top of that, I found out that I am paying too much for another group policy through my employer (for $300,000). I want to get rid of that as soon as possible; unfortunately, I am unable to until the end of the year. An additional $100,000 coverage is paid for by my employer.
I have read so many different and often opposing opinions about whole life policies in the past few days that I am thoroughly confused and don't know whether I would be wiser to keep than to cancel it.
The reason for the total coverage of $1,000,000 (20-year term) I'm seeking is that my wife is disabled and cannot work. I want to know she is secure enough that, in case of my death, she can live off the interest. I am 46, my wife is 49.