[USER]

I am struck between a rock and hard place. i have a whole life insurance for my daughter which I brought when my daughter was 1 and now she turned 9 .i contribute around 600$ every month. As of now the cash value is 30k.

the main intention of buying this at that time was for my daughter’s college fund .9 years down the lane she will go to college and I may get 100k.

So my main question is if I take a loss of 20k and invest this 30k into an index fund and add 6k annually to the etf for next 9-12years will get me the college fund for both my daughters(I didn’t plan anything for my 2nd daughter yet).

Am I thinking straight by cancelling the policy now and taking a loss ?? if I have a pick an etf what would you suggest ??

TIA

[Doug]

Wait a minute…something sounds wrong. You’ve had the policy about 8 years and “contribute around 600$ every month”.

That works out to over $57,000. For a $30K policy?

[Jule]

Yes, cancel it and take the value to invest it in an ETF that tracks the total stock market.

[Dena]

I Would still have some sort of life insurance for her. I was diagnosed with cancer quite young even with no cancer in my family.

Had I not gotten a policy in my 20’s I’d never be able to get one now!

It can be a term 80 policy, but definitely get something!

[Sean]

You’ve contributed over 57k to save up 30k for college. This makes zero sense. The loss is already there.

Assuming you are correct that 9 more years will get her 70k more cash value you’re still taking almost the exact same loss.

[Ben]

Looks like they didn’t even set up the policy right for your goal. I know some people who went the same way and their policies are at break even if not making money already.

They could have done better in the market, but they are pretty conservative, so

[Scott]

Just to pile on, get out and get out now. Whole life will never beat the market over time.

Put the money in a 529.

Whatever number that you wind up with when you need it, will be more than continuing what you’re doing.

Btw 30k +600 a month, over 9 years is 168k.

That’s why they’re offering you 100k. Run.

[Jason]

Also, if it’s for college, why is this not in a 529? Tax advantaged account.

[Jianle]

A simple compound calculator says yes. You start at 30k, adding 500/month for the next 9 year, with a conservative 7% return, you get ~127k.

[Joe]

At $600/month for 17 years, you were planning on paying $122k in hopes to get $100k for college????

Cancel and put that money in an SP500 ETF like VOO.

FYI, the SP500 has returned 10% the past 7 years.

If you invested that $600/month in the SP500, you would have $88k.

[Author]

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