Submitted by Khatanghe t3_11g6uzz in personalfinance
Five years ago when I was fresh out of college and not particularly financially literate a close friend of mine became a life insurance agent and sold me on a whole life policy. Despite being skeptical at the time I went against my better judgement and decided to trust this person as we'd been friends my entire life. As I'm now attempting to save money for a down payment on a house (which is already a monumental task in my area) I am realizing that I need to move past the sunk-cost-fallacy and accept that I've been had.
I've paid $18,000 into this policy ($300/month) and my cash value is only ~$4,500. The cash value of my account will not equal the premiums I've paid for another 15 years.
Is it time to take the 75% loss? Am I being impatient and should find other areas to save?
I've read some conflicting articles about surrendering policies - some of which claim I would be returned the premiums I've paid in addition to the cash value, but obviously my cash value is far less than what I've paid in. From other experiences I've seen on this sub it also seems like this is not the case.
Needless to say I've lost a lot of trust that I had in this person. Currently I am just trying not to feel bitter about the money I will be losing and be glad that I'm learning from my mistakes.
EDIT: disregard the paragraph about premiums, this was only for policies whose cash value has caught up to the amount paid in - a point I’m >15 years away from, my mistake.
EDIT2: thank you all for the advice. The next anniversary of my policy is in May which will increase my cash value by ~$2k, so it may be worth keeping a couple more months to get a little extra money back. I’ll still be at a significant loss, but at least I won’t have this hanging over me.
Some more details - I do not have dependents, I am in good health (nonsmoker), the coverage is $300,000 and my annual dividend is $882.