How to handle life insurance policies once you don't own the shop anymore

First off, congrats on the sale. Second, your agent being on vacation is a blessing—gives you time to actually read the policies instead of getting a sales pitch. Key person policy on yourself? Usually the business owns that and pays the premium. If the business is sold, the the policy might have been transferred or terminated. Check the ownership docs.

I kept my whole life policy after selling my bakery. It was cheap and I'm old, so cashing out made no sense. But the key person one—that's a different animal. Who owned it? You or the company?

If the key person policy was owned by the business, and the business no longer exists, that policy is likely terminated unless there was a provision to transfer it. But honestly, who cares. Whole life—keep it if you can afford the premiums. It's not a business asset anymore, it's just your personal insurance.

Marlene's right. But also check if the whole life policies have any loans against them or if they're paid up. Sometimes people forget they took a loan from the cash value years ago. And dont let your agent talk you into a 1035 exchange into some annuity you don't need.

I sold my plumbing business three years ago. Had a whole life policy I'd been Paying on for 20 years. My advisor said cash it out and invest the difference. Worst advice ever. The cash value was decent but the new investment tanked. Should've just kept the policy. Hindsight, etc.

Confidence is cheap. Ask them to show you the numbers in writing. Surrender value vs. death benefit vs. future premiums. If the policy is old, the math often favors keeping it, unless you need the cash now.

Key person policy on yourself that was owned by the business—did the sale agreement address it? Sometimes the buyer assumes it or the seller has to surrender it. If it just 'dissolved' with the entity, you might have left money on the table. Not trying to stress you out, but worth a call to your attorney.

Also, if the whole life policies have cash value, you culd do a 1035 exchange into a long-term care policy or something. But that's a whole other rabbit hole. My advice: keep them if the premiums are manageable, cash them out if you need the money. Don't overthink it.

One more thing. Since you no longer own the shop, the whole life policies are just personal life insurance now. No business deduction, no key person justification. If they're modest policies, fine. If they're huge, maybe think about whether you still need that much coverage. But that's a personal decision, not a business one.

And don't forget to update your beneficiaries. I forgot for two years after my divorce. That was awkward, though.