I am retired and fully invested. Deciding between surrendering one of my life policies or cashing out from my stock or unit trust investments to fund my next 6 months of living expenses. Which one?

I think it is important to ensure you have adequate insurance in the first place.

Hi anon,

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While I'm late, I'll have some points which I think you will want to tihnk about

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1. In general, always let go of the most volatile investments as you shift towards a defensive stance in your retirment. You don't have to let go of everything at once, liquidating in phases is ok
2. Does your policy cover CI? If it does, you will generally want to hold on to it. The payout will be more than the surrender value
3. If the policy doesn't cover CI, then are you servicing the premiums still (older policies have premium terms that are for life/till 85)? If so, check the latest policy illustration tables. Some policies, if they have compounded for years, would be at a point where the premiums are lesser than the growth in the guaranteed surrender value, and this is something that you should hold on too until it's really needed. Also, if you do have dependents, then death coverage will be still useful if anything should happen to you.

All the best!

Start with the investment that gives the least ROI.

For your life policies, it will depend on the protections. If policies highly duplicative, check whether you could take a loan against the guaranteed sum from the one of the least coverage. Though ended up with a lower coverage, you are still covered with some living expenses. Do your maths.

Life Insurance Policy: Surrendering a life insurance policy will provide you with a lump sum, but you will lose the death benefit coverage. This may impact your overall financial plan and legacy planning if the life insurance was intended for that purpose. Carefully review any surrender fees or taxes that may apply before you decide to cash out!
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Investment Accounts: Cashing out investments like stocks or unit trusts will provide you with funds, but be sure to consider the tax implications of withdrawing from taxable investment accounts versus tax-advantaged accounts like IRAs or 401(k)s. Assess the impact on your long-term investment portfolio and whether you can afford to withdraw from those funds for the short-term