<prompt> Human: I have two whole life insurance policies through Northwestern Mutual I opened in my mid-20s now 34. One is a 100,000 policy and the other is a 250,000 policy. My combined premium is about 294 a month and the accrued cash value is around 12,000.I originally bought them as an investment and retirement vehicle before I had a job that offered these things. Ive also since gotten married, and my wife and I are looking to buy a house in a year or two. My wife thinks the policies arent worth it despite her being the beneficiary if I die.Is there a better place I should be putting that money? Should I cash out the policies and take the loss to help out with our down payment? Should I keep the policies for at least for a certain period in order to not take as much of a loss? Or should I just keep the policies and look at it as a retirement money. As an aside, I am also enrolled in my companys 403b and they will match starting next month.Thoughts? Advice?Thanks!  <response>: First, your wife is spot on. You should never mix life insurance and investments because all youre doing is paying a fee to the life insurance place to invest for you and then allow you to have some of your own money. Its stupid.But lets look at the situation and pretend its a 350k whole life policy for 294month that is now worth about 12k.Now, what if you had bought a 350k term policy depending on your health this should cost around 30month. Im giving a ballpark because my 500k policy is 40month and Im 32.So if you had paid the 30month life insurance premium and invested the 264month and managed to only receive a 5 return. It would have taken you 5 years to have about 17k in the bank. 10 years like youve spent in your whole life policy would have grown to about 40k. If you had managed a 10 return then those numbers are 20k and 53k respectively.So you would have had your insurance protection, plus access to more money than you have now with your whole life policy.You should absolutely cash it out and get a reasonable 20 or 30 year term life policy and then put the extra amount youre saving each month into low fee index funds such as Vanguards. You should do this in the order of 403b until youve maxed your companys match, Roth IRA until maxed, back to 403b, then a taxable brokerage account. See the sidebar for more details.The sooner you do it the better because youre losing money every month you give that premium to your insurance company. 