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Anonymous

Edited 27 Jul 2021

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Surrender Life Policy to Buy Term & Invest the Rest?

My mum got me a whole life insurance policy with AIA (Financial Guardian) when I was 2 years old. She was paying $1000/year and now that I'm 26, the policy has already broke even and has a surrender value of $32k.

The question now is, is it wise for me to continue holding this policy for years to come? I'll still be paying $1k a year. Or should I withdraw on the next policy anniversary so that I can use the money to DCA in indexes (looking at VOO/KWEB at the moment) over the next 4 years?

Some context: I'm working in a civil service job but have plans to leave in 2023.

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CH

Edited 27 Jul 2021

If it was me, i will just keep it if there is no further premiums to pay and the gauranteed portion is increasing every year. i will think of it as a higher yielding fixed deposit which i can almost immediately withdraw in emergency. $32k is like more than 6 months salary worth of emergency cash.

then use my own salary and savings to invest in other ETFs or whatever that i wish.

it is of course very tempting when people say "buy term invest rest" and other slogans. but be careful of ulterior motives they may have. are they also trying to sell you some products or investments or courses?

hope this helps.

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