I have a variable life insurance policy that I was using as retirement as it is paid up by 2012 and then I get a very small income monthly. It has a cash value of $5,000.00...........Should I cash this in now before I file and use the money to buy things I need, or use to put down on a car if I turn my lease in early?????or will they let me keep it as a retirement?
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Check the exemptions in your state. You may be able to keep the cash value of the life insurance policy thru the BK IF you do not cash it in - in other words, it may be an item you can exempt.
Look here to check it out: www.LegalConsumer.comFiled CH 7 9/30/2008
Discharged Jan 5, 2009! Closed Jan 18, 2009
I am not an attorney. None of my advice is legal advice in any way.. -
Life insurance, insurance annuities and their possible pay outs are all exempt. We have an annuity that we call part of our retirement. It is 26K a year. It was never questioned. 'HubIf I knew it all, would I be here?? Hang in there = Retained attorney 8-06, Filed 12-28-07, Discharge 8-13-08, Finally CLOSED 11-3-09, 3-31-10 AP Dismissed, Informed by incompetent lawyer of CLOSED status, October 14, 2010.Comment
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Let's back up, that is NOT true in every state. Cash value life insurance comes down to the wording of your states exemptions. Generally, the "pay out" (to the beneficiary) is exempt, but the underlying equity of the cash value to the holder of the policy may not be. In some states, the cash value is not exempt, some states it is exempt, and some states have a funky calcuation based on "x" months of recent contributions.Originally posted by AngelinaCatHub View PostLast edited by HHM; 09-12-2009, 07:41 PM.Comment
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Either way cash the piece of trash out. Get you some term life insurance and invest in things that might actually make you some money!New Orleans: Home to the World Champion Saints, the biggest enviromental disaster and the biggest natural disaster in the history of this nation. Proud to call it home!Comment
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Well, I wouldn't go that far, cash value life insurance has its place, but more on the higher end of things. Keep in mind, you can borrow against the cash value, TAX FREE at retirement, so its an additional vehicle to provide tax exempt income at retirement, the only other way to do that is with Roth IRA's. 401k's and traditional IRA's use pre tax dollars but the distributions at retirement are taxable, whereas the distributions from Roth IRA's and Whole Life Insurance are tax free at retirement. But, whether whole life insurance makes sense in your case is something you should discuss with a financial planner.Originally posted by LSUTiger32 View PostComment
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