In my opinion, the irritation of having accounts open with a very small balance and little chance of ever increasing in value far outweighs the tax hit from consolidating investments.
My wife had a similar policy that her father opened for her years ago. It had a cash value of something like $3000. For us, it was an easy decision to cash it out and put the money with our other investments. If the value of the policy were substantially greater, we may have given it more thought.
If you qualify for an IRA contribution, and expect to continue to qualify for the foreseeable future, I'd vote for taking the tax hit (which will likely not be that substantial), and moving the money to a Roth IRA. Then continue to fund the IRA in the future.