Posted: Fri Jun 20, 2008 2:02 pm Post subject: Life Insurance Equity?
Last month i resigned from my full time job and start freelancing.
I received a letter from my insurance company that my life insurance policy with my company can either be transferred to personal policy or cancel it since i am no longer part the company. Well, i have no dependents and i am planning on just dropping it.
my question is, after 6 years, would my life insurance policy have any equity? If there is an equity, should I transfer it to personal policy and cash out the equity?
my question is, after 6 years, would my life insurance policy have any equity? If there is an equity, should I transfer it to personal policy and cash out the equity?
Well, that I guess will depend upon the type of the plan that you have purchased. For a pure term life plan, the benefits of the policy ceases the moment the policy holder stops making payments towards it. But also, there are certain whole life plans, which allow the policy holder to receive a portion of the policy benefits after a certain period of time. You're required to re-read the policy document to understand your benefits better.
without any dependent, purchasing the life plan may not sound a good deal as its main objective remains to compensate the financial loss that may arise at the time of untimely death of the earning member of the family. hence, you may consider dropping it and save the money that goes towards the premium payment. Instead, you may consider purchasing a long term care plan, which will meet the expenses of extended medical care that you may require at your older age or in case you suffer a disability.
Well, some life plans too now-a-days offer the benefit of critical illness coverage as a rider with the main plan, you may consider availing one of those too. Just weigh all the options before you decide upon dropping the plan. IMO its always wise to have some sort of insurance coverage, as we need them to face the uncertainties. Just my 2 cents, kindly adjust it against the inflation
Well, it sounds to me like the keyman's plan. Its a term life plan (in most cases) that the employer takes out against the key employees as a protection against the revenue losses that the company is likely to suffer at the event of his/her death, disability and sickness.
Aleish, please, response to the questions and do correct me if I've got you wrong. _________________ Register Now to have your Insurance queries solved.
My guess is that the policy you have on your company is a term insurance. Most of the time (depending on the policy) this type of insurance does not earn cash values, so you cannot expect any equity from it. But the best thing that you need to do is to check on what type of insurance you have. If for any reason that you have earned some equity, I would suggest you follow what Juanita said. Use the money to purchase a long term care plan. I think that is one of the things that you need to consider. _________________ Free Insurance Quotes
