whole life insurance question

[lennstrom14]

What is the name of your state? new york
my husband has a 3 whole life insurance policiies that he has borrowed on over the years ..he said it was getting too expensive to pay it back so he called his agent and the dividends were paying the monthly premiums ..the agent told him if he closes the whole life policies they are like annuities and he will have to pay taxes on the amount he is paid ...is this the only way to deal with the problem...cant the life insurance be converted to term with the same co or rolled into an ira ...
his policy if he dies will be worth 80,000 ....if he takes the proceeds he will see about 20,000 less taxes ....any advice would be appreciated ...
my husband is sick with prostate cancer and obsessive compulsive problems cant penalties be waived like a 401k or ira for disability ...thanks again ...

 

[Betty]

What is the name of your state? new york
my husband has a 3 whole life insurance policiies that he has borrowed on over the years ..he said it was getting too expensive to pay it back so he called his agent and the dividends were paying the monthly premiums ..the agent told him if he closes the whole life policies they are like annuities and he will have to pay taxes on the amount he is paid ...is this the only way to deal with the problem...cant the life insurance be converted to term with the same co or rolled into an ira ...
his policy if he dies will be worth 80,000 ....if he takes the proceeds he will see about 20,000 less taxes ....any advice would be appreciated ...
my husband is sick with prostate cancer and obsessive compulsive problems cant penalties be waived like a 401k or ira for disability ...thanks again ...

On whole life policies if you surrender the policies & a cash value has accumulated or the policies lapse for non-payment of premiums & a cash value has accumulated (usually there will always be some cash value unless the policies have been in force for only a very short time), the CV minus any policy loans will be available to the policyholder. They can take the CV in a lump sum or there are other options. They can use the cash value to buy reduced paid-up ins. - it will be a reduced amt. of WL insurance. They can also use the CV to buy extended term ins. for the full amt. of the orig. pol. (minus any pol. loans) - the length of the term depends on the net cash value available & the insured's attained age. At the end of the term, the coveragte would lapse w/o value. You might want to recontact your agt. & have him go over all available options with you & the pros & cons of them.