We never recommend keeping a cash value policy. This includes whole life, universal life and variable life insurance. The only case where we would suggest you keep this policy is if you are unable to qualify for a term life plan. However, those cases are few and far between.
The premise of a cash value plan is to overcharge you, tricking you into thinking you will need life insurance your whole life! We believe that within 15-20 years, if following the Baby Steps, you should be at a point where your family has built enough wealth to sustain themselves without a life insurance policy. This is what we call being self-insured.
If you have one of these plans, we would simply suggest reaching out to your provider and cancelling your policy with them. The good news is that if your policy has a cash value, you can now use that cash to fuel your Baby Steps!
Note that when attempting to cancel your policy, most companies will try to imply that there will be serious tax penalties. There is very rarely any tax due and, if there is, it is based on the amount you receive back that is in excess of the premium you paid. By multiplying the number of years you have paid the premium times the annual cost, you can quickly determine the extent of any tax that may be due. Remember: never cancel your policy until you have a new term life insurance policy set up!
We recommend getting term life insurance through our RamseyTrusted® provider, Zander Insurance. Here is the link to their website, and you can reach them at 800-356-4282.