biophase
Platinum Contributor
FASTLANE INSIDER
EPIC CONTRIBUTOR
LEGACY MEMBER
Read Rat-Race Escape!
Read Fastlane!
Read Unscripted!
Every year I struggle with this issue. I have a $100,000 life insurance policy that has the following numbers:
2001: cash value $10,600, dividend $498, premium $766
2002: cash value $11,600, dividend $451, premium $766
2003: cash value $12,281, dividend $404, premium $766
2004: cash value $13,086, dividend $420, premium $766
2005: cash value $14,092, dividend $442, premium $766
2006: cash value $15,418, dividend $468, premium $766
2007: cash value $16,247, dividend $495, premium $766
2008: cash value $17,400, dividend $595, premium $766
This year I have to pay out ($766-$595) $171 to keep the policy going. Every year the cash value of the policy goes up by about $1,100.
I basically have $17k tied up and its value is increasing $929/yr ($1100-171) which is a 5% return. Not too bad in this market. However it is $171 out of pocket this year and will be $100 out of pocket next year. In 3 years the dividends will equal the premium and I won't have to make any payments.
If I cashout I will have to pay taxes on a $5,000 gain.
So the question is, do I keep this policy or not?
2001: cash value $10,600, dividend $498, premium $766
2002: cash value $11,600, dividend $451, premium $766
2003: cash value $12,281, dividend $404, premium $766
2004: cash value $13,086, dividend $420, premium $766
2005: cash value $14,092, dividend $442, premium $766
2006: cash value $15,418, dividend $468, premium $766
2007: cash value $16,247, dividend $495, premium $766
2008: cash value $17,400, dividend $595, premium $766
This year I have to pay out ($766-$595) $171 to keep the policy going. Every year the cash value of the policy goes up by about $1,100.
I basically have $17k tied up and its value is increasing $929/yr ($1100-171) which is a 5% return. Not too bad in this market. However it is $171 out of pocket this year and will be $100 out of pocket next year. In 3 years the dividends will equal the premium and I won't have to make any payments.
If I cashout I will have to pay taxes on a $5,000 gain.
So the question is, do I keep this policy or not?
Dislike ads? Become a Fastlane member:
Subscribe today and surround yourself with winners and millionaire mentors, not those broke friends who only want to drink beer and play video games. :-)
Membership Required: Upgrade to Expose Nearly 1,000,000 Posts
Ready to Unleash the Millionaire Entrepreneur in You?
Become a member of the Fastlane Forum, the private community founded by best-selling author and multi-millionaire entrepreneur MJ DeMarco. Since 2007, MJ DeMarco has poured his heart and soul into the Fastlane Forum, helping entrepreneurs reclaim their time, win their financial freedom, and live their best life.
With more than 39,000 posts packed with insights, strategies, and advice, you’re not just a member—you’re stepping into MJ’s inner-circle, a place where you’ll never be left alone.
Become a member and gain immediate access to...
- Active Community: Ever join a community only to find it DEAD? Not at Fastlane! As you can see from our home page, life-changing content is posted dozens of times daily.
- Exclusive Insights: Direct access to MJ DeMarco’s daily contributions and wisdom.
- Powerful Networking Opportunities: Connect with a diverse group of successful entrepreneurs who can offer mentorship, collaboration, and opportunities.
- Proven Strategies: Learn from the best in the business, with actionable advice and strategies that can accelerate your success.
"You are the average of the five people you surround yourself with the most..."
Who are you surrounding yourself with? Surround yourself with millionaire success. Join Fastlane today!
Join Today
