2. Keep the policy as an investment, if it's paying well. A few older policies, from top companies, are paying interest on cash values in the 3 to 5 percent range, after taxes and expenses — far more than you'd earn in a bank account. You can let the investment build and tap it for cash in the future.

3. Sell the policy for more than its cash surrender value. Investors generally buy policies from people whose health is poor. You get a lump-sum payment. The investor pays the premiums and collects the payout when you die. But it's hard to know if you're getting a fair price. If your expected life span is short, your heirs might prefer to pay the premiums themselves rather than let the policy go to a stranger, says fee-only insurance adviser Scott Witt in New Berlin, Wis.

4. Pour your cash values into an annuity, tax-free. The process is called a "1035 exchange." You can buy an immediate annuity for current income, or a tax-deferred annuity for investment. The deferred annuity has advantages if your insurance policy shows an investment loss. You can use the loss to tax-shelter the annuity's future gains.

5. Use the cash value to acquire a long-term care policy. This is also done through a tax-free 1035 exchange.

Where can you get good advice? This is the toughest question of all. Insurance agents aren't paid to service old policies, they're paid to sell new ones. Here are the only sources I know for independent advice on what to do with your current policy:

The low-cost service EvaluateLifeInsurance.org, run by retired actuary James Hunt for the Consumer Federation of America.

Fee-only insurance advisers, who charge perhaps $300 an hour, or fee-only financial planning firms that consult with expert insurance advisers.

GlennDaily.com, which links to eight other fee-only advisers, as well as to organizations of fee-only planners.

In the murky insurance world, independent advice is well worth paying for.

Jane Bryant Quinn is a personal finance expert and author of Making the Most of Your Money NOW. She writes regularly for the Bulletin.