What if you want to surrender your life insurance policy?

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PostPosted: Thu Jul 30, 2009 12:06 pm   Post subject:   

Quote:
Hi and thank you for your time, I have whole life 150,00 policy paying 175.00 monthly i'm 47 years old, cash value 26,000 and thinking of surrending it, taking cash value out, buying level term policy for 150,000 30 years , paying 84.00 monthly would that be smart or what do recomend?




A few things to note:



1. Keep in mind that if you surrender your policy, you may also incur a taxable event if the cash value paid out is greater than your cost basis (i.e. premiums paid into the policy).



2. $84/month seems awfully high for $150k of 30-year term for a 47 year old female. Even at standard rates, I come up with $50/month for a couple of companies. A $150k policy guaranteed forever (no-lapse UL) at standard rates would be approximately $110/month. If you are in good health with normal height/weight profile, normal family medical history, those premiums could drop to ~$90/month guaranteed forever or $29/month for 30-year term.



3. If you did not want to pay any more premiums, you could exchange the cash value for a paid-up policy that is guaranteed to never lapse with a different company. If in perfect health, you could get a $250,000 death benefit with a lump sum transfer of approx. $25.5k. If in standard health, you could get approximately $210k death benefit with a lump sum transfer of $26k.





If you want to explore these options, feel free to send me an e-mail at dgold@goldfinancialgrp.com. I'm an independent agent and would be happy to put you on the right track. Sounds like your current agent is trying to sell you an overpriced policy unless you have some major medical conditions.
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PostPosted: Sun Jun 27, 2010 8:41 am   Post subject: mortgage and life insurance  

my mortgage and life insurance is with the same company. will they accept my life insurance before i die as a trade to pay off my mortgage and then no life insurance payment is made when i die


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PostPosted: Sun Jun 27, 2010 3:22 pm   Post subject:   

I guess the key phrase here is "before I die."

Allianz used to sell a product called an Equity Index LifeFund III that, in my opinion, was one of the best policies I've ever seen.



Built into the policy was something called a Preferred Settlement Value (which was really nothing more than a type of modified accumulation account) that could be used at retirement - or some point in the future - as a source of income. However, when the PSV was utilized, the policy was terminated.



Now, back to your question; I've never seen a case where a mortgage/insurance company traded the settlement value of a life policy in that way. I'm not saying it absolutely couldn't happen - especially if you were terminally ill and the company could benefit from the transaction (the most important provision). I just seriously doubt they would do it.



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PostPosted: Wed Jan 25, 2012 3:55 pm   Post subject:   

This is not a relationship advice column. Moderators, please delete the spam posts and block the spammers please.

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PostPosted: Mon May 21, 2012 6:39 pm   Post subject: whole life insurance  

a family member is leaving me 4500 dollars in a whole life insurance policy when they die? Can I cash this out now, if they agree and how much would I receive? Money has been sitting there since 1995.


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PostPosted: Tue May 22, 2012 2:57 am   Post subject:   

Quote:
Can I cash this out now, if they agree and how much would I receive? Money has been sitting there since 1995


This is an odd request. Why would "they" agree to cash out the policy now and give you the money instead of keeping it for themself?



A $4500 policy "sitting there since 1995" would not be worth $4500.


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PostPosted: Mon May 28, 2012 10:50 am   Post subject:   

You can't cash it out because it is not your policy.


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PostPosted: Thu Jun 07, 2012 2:08 pm   Post subject: Cash Value policy  

I have 2 cash value policies both worth $25,000. I have other insurance also well over $400,000. I was thinking of cashing these 2 policies in later down the road for the cash value (maybe in 20 yrs; I've had the policy for only 10 yrs now). Is that a good idea? I got this policy when I was single and make very small monthly payments ($100). your thoughts.


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PostPosted: Thu Jun 07, 2012 4:54 pm   Post subject:   

Quote:
I was thinking of cashing these 2 policies in later down the road for the cash value (maybe in 20 yrs


Have you consulted your Magic 8-Ball on this one yet?



You can't be serious asking a question in 2012 about what you should do or might do in 2032. No one here can give you a better answer than that Magic 8-Ball toy.



Anything could happen in the next 20 years . . . you could die, the Martians could take over the world and having life insurance or its cash value, or stocks, or bonds, or mutual funds, or cash under the mattress all become meaningless, or Jesus could return and some of us would be overjoyed as we walk the streets of gold while others would have considerably different concerns that no amount of life insurance cash value could solve.



Or Obama could be reelected in November and within the next four years AmeriKa the socialist state becomes a reality . . . and your cash value is confiscated and given to those who have no life insurance at all and demand the government give them some -- for free, just like Obamacare.



I can tell you this, in the meantime, don't stop making those monthly payments, or your cash value will surely evaporate, regardless of the outcome of any of my "thoughts" above.


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PostPosted: Mon Jul 23, 2012 4:48 pm   Post subject: 75,000 life policy too expensive now  

I have had my $75,000 whole life policy for many years..I am 77 years old in decent health..the yearly premiums are getting to expensive..could I cash it in and buy a

term policy to protect my wife and reduce my yearly outlay / or what would be a better choice???


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PostPosted: Mon Jul 23, 2012 7:18 pm   Post subject:   

You could "cash it in" but you will almost certainly NOT like the cost of a term policy at your age. A new term policy might have a level premium for 2-5 years, but it would eventually become Annual Renewable Term, meaning your cost of insurance will increase CONSIDERABLY every year thereafter. In the next 20 years or so, you would pay in the neighborhood of $175,000 or more in premiums to keep that $75,000 death benefit to age 95



I assume when you say "the yearly premiums are getting expensive" you mean the same amount you've been paying all these years is now a much larger percentage of your monthly/annual income. If your actual premium is increasing, then you probably do not have a typical Whole Life policy.



One alternative would be to work with a LICENSED Life Settlement Broker who would find someone willing to "buy" your insurance policy from you. Even that's going to be difficult because your insurance amount is relatively small at only $75,000. Your wife would no longer be the beneficiary.



Another alternative would be to make a Section 1035 Exchange of your policy's cost basis and cash value into a new, "guaranteed minimum death benefit" form of Universal Life insurance. This policy would, essentially never acquire additional cash value, and the cash value you brought into the policy would likely soon evaporate (over 5-10 years) or be used to "buy-down" the premium, but as long as you paid the premium, there would be a $75,000 death benefit available. Missing a premium payment in the future could void the guarantee, and you could be forced to pay even higher premiums to keep your policy alive -- the same scenario as buying that very costly term policy.



Similarly, the cash value in your current policy may also be enough to pay the premiums for a number of years into the future, but that, too, will erode the death benefit over time, as the loans to pay premiums accumulate with interest (if you were not paying some or all of those amounts back to the insurance company).



For now, don't give up what you have. It may be the best thing for you. That would be the most dreadful mistake.



As a Licensed Life & Disability Insurance Analyst, I can perform an unbiased policy analysis for you to give you a better idea of what your options are or may be.



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PostPosted: Mon Jul 23, 2012 8:47 pm   Post subject:   

Are California Licensed Life and Disability Insurance Analysts, allowed to solicit business from out of state?



From what you've written about disability coverage in the past, hopefully, you don't have any customers who are paying you for DI advice.


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PostPosted: Tue Jul 24, 2012 12:23 pm   Post subject:   

This is not a question about DI, if you had taken the time to read the post, it's about life insurance.



CIC 32.5. "Life and disability insurance analyst" means a person who, for a fee or compensation of any kind, paid by or derived from any person or source other than an insurer, advises, purports to advise, or offers to advise any person insured under, named as beneficiary of, or having any interest in, a life or disability insurance

contract, in any manner concerning that contract or his or her rights in respect thereto.



This does not mean soliciting insurance. And it does not require compensation.



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MaxHerr
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PostPosted: Tue Jul 24, 2012 5:41 pm   Post subject:   

Max,



I understand that his question was about life insurance. I was just pointing something out about DI.



I thought that the part "for a fee or compensation of any kind..." required compensation. Since that is integral to the definition, if you remove the fee, how are you working as an analyst?



I didn't ask whether you you could solicit insurance out of state. I know that the answer to that is "no".



I asked whether you could solicit "business" from out of state. In case I wasn't clear, I was asking about your ability to solicit analyst work out of state. I asked the question because I don't know the answer.



Is Max Herr, a California licensed "Life and Disability analyst" allowed to solicit business on a public forum to do analyst work?


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PostPosted: Thu Sep 20, 2012 6:32 pm   Post subject: surrender policy  

i have fill out all the necessary form ot surrender .how long will it take to return


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