Is It Time to Pull the Plug? Weighing the Pros and Cons of Canceling Your $2,800 Monthly Universal Life Insurance Policy After 10 Years
- A friend recently approached me with questions about an insurance policy they signed up for earlier this year.
- The policy also claims that if the funds are left untouched, they will roll over again, allowing the policyholder to access them when needed.
- As someone who contributes to the maximum IRA limit each year and is self-employed, I don't qualify for a 401k.
Understanding Milemoa Insurance Policy: Is it Worth the Investment?
A friend recently approached me with questions about an insurance policy they signed up for earlier this year. After researching Milemoa, it appears to be a contentious product, but I’d like to gather more insights from Milemoa members.
The policy requires a monthly payment of $2,800 for 10 years, which is invested in a designated index fund. According to the expected profits, the money will grow, and after about 20 years, the policyholder can potentially spend $130,000 per year without paying taxes.
The policy also claims that if the funds are left untouched, they will roll over again, allowing the policyholder to access them when needed. However, I’m skeptical about the benefits of deferring taxes, especially considering my current financial situation.
As someone who contributes to the maximum IRA limit each year and is self-employed, I don’t qualify for a 401k. I also don’t have plans for children, making a 529 tuition plan irrelevant. Given these circumstances, I’m unsure if deferring taxes through this policy is the most effective strategy.
Now, I’m considering an alternative: canceling the policy and investing the funds in a taxable index fund account. I’d appreciate feedback from Milemoa members on whether this approach might be more beneficial in the long run.