Of course, Myerson’s rate of return calculation is based on me holding the policy, paying premiums to age 85 and seeing the $150,000 death benefit going to my estate. (See Myerson’s analysis, page 40.) The calculation is refined by the fact that I have benefited from 10 years of coverage for $150,000 of death benefit. Hence, my net cost for what was effectively 10 years of term coverage is $2,428 or $248 per year. “Without considering the time value of money, the annual cost of $248 for 10-year term insurance paying a $150,000 death benefit is quite a bit lower than would currently be available for a 57-year-old man,” Myerson says. “In the current economic environment, an after-tax yield (subject to your life expectancy) of 6.9 percent is somewhat hard to obtain in the general market. However, given the fact that you appear not to need the insurance protection, combined with the risk of increased costs, I would be inclined, on balance, to surrender the policy and enjoy the proceeds (and saved premiums) during your lifetime,” Myerson concludes. I’ll count Myerson’s vote in the “surrender” column. Based on the illustrations he pulled, Peter Blatt, founder of Blatt Financial Group in Palm Beach Gardens, Fla., suggested that my best course was to surrender the policy. “This policy is a wasting asset,” Blatt says. “It doesn’t make economic sense to continue supporting it.” He estimated that surrendering the policy would incur no tax liability (in fact, I would get a tax loss). If, on the other hand, surrendering the policy would create a taxable event, he would be inclined to roll the policy over to a variable annuity using a 1035 Exchange.

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