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Whole Life almost paid up, should I just pay it, or cash out?

my parents started me a WL policy worth 200k, when i was 13 and it's been almost 20years and it's 2-3years away from being paid up (per my agent), should I just suck it up and pay it up or should I cash out now? he said the policy is getting an interest rate of 5.5% hopefully this all makes sense, as i'm not that insurance savvy.. thanks! I don't need the money. and as I research more on WL, I'm reading tons of opinions on how big of a waste and scam it is. I'm seeing the situation as, since the market is so beat up right now, I'm sure I can do better than the 5.5% in a mutual fund, in the long run.

Public Comments

1. 5.5% hold out and pay into it, thats a great rate.
2. Pay it! It will be there for any emergencies later or even college tuition
3. You're 33 years old, and almost have a paid-up life insurance policy. Congratulations! 1) do you need the insurance? Probably will some day and since it's almost paid for, keep it. Replacement at your current age will be much more expensive 2) do you need cash now? if yes, you can usually borrow against cash value at a modest interest rate. It reduces the face value of the policy if you die before paying it off, though. 3) seek professional help. Find a good financial planner in your area... they'll explain what you have and probably not try to sell you anything - pay them for their time.
4. Have him put it in writing. Your policy is NOT getting an "interest rate" of 5%. RUN THE NUMBERS. If you cashed it out right now, and invested the money for another 20 years (you'd be buying low, in today's market!), how much would you have at 10% growth? On the other hand, if you leave it sit right there, ask the agent to put IN WRITING, without you paying in another dime, how much it's worth. Keep in mind, if it's the CASH VALUE increasing, as soon as you die, the INSURANCE COMPANY gets that cash value, NOT YOU!! Or your heirs. Cash value is ONLY any good, if you CANCEL the policy!!!! Or borrow it, and THEN you get to pay the insurance company interest on it!! Think it through.
5. If you're that close to having it completely paid up, wait it out and pay if up. I don't know what your personal situation is, but if you ever have kids, buy a home, start a business, having that insurance will come in handy and it will save you having to buy more insurance down the road. Down the road you can also borrow the cash value out to add to your income tax free. On a limited pay policy, it is VERY rare that is is worth cancelling when you're past the half way point. I would assume the cash value of it is no where near the value that you've put into it or the value you would get out of it in case of a claim. Unless you are absolutely desperate for money, don't cancel it.