Should I spend my life insurance policy’s cash value?

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 Q. I have a whole life policy with a cash value of $16,000. Is there any reason I should use the cash value now? I have a few bills to pay. Thank you!

A. It sounds like a simple question, but really, it’s not.

So much depends on your overall financial life and what part of your financial plan this policy plays.

“A real financial plan isn’t as simple as answering general questions like Suze Orman,” said Vince Pallitto, a certified financial planner and certified public accountant with Summit Asset Management in Florham Park.

He said some of the factors to consider are why you got the insurance in the first place, and whether or not you will need life insurance in the years to come.

It’s also important to consider your health, he said, because if you’ve had medical issues, the cost of replacing this policy, if needed, could be cost-prohibitive.

“Every year insurance become more expensive,” Pallitto said.

With the cash value you mentioned, your policy has probably been in place for at least a few years, so it would make sense for you to meet with a financial advisor to analyze how it fits into your overall finances.

If you don’t have a planner, consider a free money makeover with a certified financial planner through

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This story was first posted in April 2015. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.