Poor return on Whole Life policy

Dear Mr Tan,

I am currently 28yrs old. I have a wholelife policy which I believe give me a poor return.

Sum assured $40,000
Annual premium $694 /yr
Policy inception: Dec 1993, paid 13 yrs of premium already
Surrender value now: $7,500

Should I surrender the policy and invest in stocks, ETFs when the stock market corrects?

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REPLY:

The cash value now is less than the total premiums paid for 13 years. The return has been unsatisfactory. Most policies should have provided a positive return after 10 years.

I suggest that you should ask the company to give you a projection of the cash value in 10 years time. This will help you to decide if you should keep the policy for the next 10 years, or to move to another investment.