Whole life policy gifted to me- best way to use?

For better or worse, my parents have decided to use whole a whole life policy as their way of estate planning and passing wealth down to us. I’m not looking for criticisms on how that may have been accomplished more efficiently. The bottom line is I am the owner of a whole life policy with my mother (73f) as the insured. It was a 10-pay policy that has been fully paid off, with the final payment being paid with a policy loan. Cash value is 6.3M with the loan value taking that down to 5.5M, which is the amount I am able to take out as a loan. Death benefit stands at 10.2M

My circumstances are that of a 42M who doesn’t have a high paying job, so I would like to use the insurance instrument to enhance my lifestyle in the years until the death benefit pays out.

My question is: what is the best way to use the policy to get cash out of it? Do I use policy loans to supplement my lifestyle? With the spread on the mass mutual dividend and loan rate, I will currently still be making 1.3 % on the amount I have out as a loan. Do I use the dividends to pay off the loan and then, in a couple years when the loan is paid off, just take the dividends as cash income (it will be around $250k / year. Is it advisable, especially if there is a down market, to take a loan to invest in the stock market (anticipating securities will grow much faster than the dividend rate)? Or Do I keep using the cash dividends for paid up additions, and then take out loans as needed?

Are there any pitfalls to any of these strategies that could screw me down the road? My main goal is just to supplement my meager income and be able to have more disposable income available to me in my 40s and 50’s, thus being able to live a better lifestyle, while still felling financially secure. I am NOT looking to just cash income a huge chunk and go crazy spending it.

All helpful advice welcome 🙏

submitted by /u/shadeyk05
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