I’m 70 years old and retired with a $2.5M investment portfolio. I no longer need life insurance and am tired of paying the monthly premium for nothing. What are my options?

With term life insurance, you’re solely paying for coverage, so you can simply cancel the policy if it’s no longer needed. Whole life insurance, however, is more than just a death benefit — it’s also an investment.

Your choices will depend on the kind of insurance you have and your financial goals. Here's how to decide.

1. Claim the cash value

The simplest, most straightforward option is to tell the insurance company you want to surrender the policy. They'll cancel your coverage and send you the cash value minus the outstanding loans.

You typically won't have any surrendering fees as long as you've had the policy for long enough. However, you will have to pay taxes on the difference between the cash value they're sending you and the premiums you paid. That could be a lot.

2. Borrow against your policy

One reason people buy whole-life policies is the belief that these policies will provide tax-free income in retirement. This tax-free income will come from loans against the cash value, although you pay some interest using the loan proceeds. You'll need to make sure you leave enough money in the policy so it remains active, and you'll eventually need to pay back the loans — although many people pay them out of the death benefit.

This approach can be a good source of retirement money for you since you don't have to give any of it to the IRS. This could be a big benefit if you're worth millions. However, you'll need to manage the loans carefully to ensure your policy doesn't collapse, otherwise you'll end up owing taxes.

3. Keep the insurance active but use the policy to pay premiums

Some universal life insurance policies let you use the accrued cash value to cover premiums. This means you can maintain your coverage without making additional payments.

Your life insurance agent can help you with your policy in order to pay the premiums for the rest of your life. If you don't, then you could still try the plan but your loved ones would receive a lower death benefit.

This can be a good option if you don't need the money and want your loved ones to get a tax-free life insurance death benefit after you die.

4. Convert your life insurance to an annuity

You might be able to convert your life insurance policy into an annuity tax-free through a 1035 exchange. Annuities can provide guaranteed lifetime income, and with interest rates still fairly high, you may be able to earn a generous return.

Ultimately, you'll need to consider which of these options makes sense for you. Just be sure to think about the long-term implications of your choice to end your coverage as it won't be easy to put another policy in place.