5. Dying with a large, underutilized cash value

life insurance cash valueWhen you buy life insurance that is permanent, your rates are higher than term life rates because permanent life insurance builds up cash value. But some experts think it's a waste of money to die with a large cash value that hasn't been liquidated or leveraged properly.

"You want to try to die with as little cash value as possible" in a permanent life insurance policy, says Dorrell. "Otherwise, [the cash value] just goes to the insurance company, and your beneficiaries simply get the death benefit."

Dorrell's advice: Older policyholders should call their life insurance companies and ask for a higher policy face value in exchange for the cash value.

"MetLife, Prudential, New York Life and Northwestern [Mutual] are among the companies that almost always will increase your death benefit with your cash value," says Dorrell. "They won't tell you about it upfront. But if you call and ask, they will generally do it for you."

Read more about cash value in life insurance: what’s it worth to you?

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