Well, here goes. In 1985 I purchased a “Flexible Premium Variable Life Insurance” contract from the Equitable. Been piling money into it ever since, but mostly in the past 6 years or so. After reading Dave and Tom's first book, I began to ask questions regarding costs (2% plus 6 bucks per deposit; figures to be about 2.5% per year), returns after insurance costs and “other charges" are deducted (I'm still waiting for an answer to that one), and others. Regarding costs, my agent replied, “that's no higher than a load mutual fund”, and “that's how I get paid”. My next question needs to be, what are you doing for me to earn that? I see the upsides of the contract to be, tax-deferred growth, tax-free withdraws at retirement (first the cash basis, then loans which are not repaid), total liquidity, and decent investment options that seem to be expanding all the time (There is even an index fund!), and a large life insurance benefit that allows me to take a larger pension from my job as a state employee. Now, what I need is some unbiased, in your face advice on how to proceed for the next 23 years. Should I stick with this program? If not, what are the tax consequences of pulling the money out and reinvesting directly in stocks? Am I being totally taken for a ride here? The account value is $31,000. The death benefit is $450,000 (yes, I do need that much insurance) and the monthly insurance cost is $66. Thanks for any and all responses.
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