I have a $250,000 face value New York Life whole insurance policy that had a disability rider and after five years it was designated as " fully paid up " with a cash value of $77,000. Like most people, I foolishly borrowed quite a bit of that cash value about 10 years ago. The interest rate is 5% which has been added to the outstanding loan every year giving me a current outstanding loan of just under $90,000 and a shrinking death benefit currently sitting at $156,000. The current cash value is down to about $10,500. The interest for 2016 was about $4,500 and it paid a dividend ( to the loan ) $1,050. I started paying back $100 every other month two years ago just to keep the policy from lapsing. I'm currently 54 years old, collecting SS Disability and LTD insurance to make up 60% of what I was earning until age 67 when it will be just the SS. My wife and I have one son who is married and still in college. My 48 year old wife works full time with good health benefits for all three of us plus her own $100,000 term policy from her employer, 401K match and a building pension. Our only debt is our mortgage. We have no car payments or credit card debt. We have about $300,000 in assets including cash, stocks and real estate. So back to my question...should I pay back the insurance loan or let the paid up policy lapse and pay the taxes on the approximately $60,000 I borrowed? I just don't know what to do? Any help would be greatly appreciated! Thank you