Originally Posted by
Hossharris
for example …
(I’m making all these numbers up)
let’s say I have a whole life
policy that I bought at age 20. The monthly cost of the policy doesn’t change, and let’s say it’s $100 a month. At age 60,
after paying in for 40 years, my policy has a cash value of $10,000. I can stop paying the premium out of pocket and use the cash value to pay the premium for 100 months (ish…). So I can stop paying at 60, but keep the insurance until 68 ish.
Your example is exactly what many people with a lot more $$ than me do to replace assets anticipated to be lost to estate taxes. They create an ILIT (Irrevocable Life Insurance Trust) and the trust then purchases a universal/whole life policy with "gifts" made to the trust ($17k per person this year). Eventually, the gifts, coupled with the accrued cash value, make the policy premiums self-funding.