by Guest » Wed Sep 23, 2009 03:15 am
I have had a policy since 1986 at $40/mo
125,000 universal life. I'm 48, very healthy non smoker, should I surender this policy, get the cash and look for cheaper? How long does it make sense to pay on a policy/or is there a good time to surender it before too long or just pay till you die.
Bottom line, is it best to keep for 23 years or cash out and look for another one??
125,000 universal life. I'm 48, very healthy non smoker, should I surender this policy, get the cash and look for cheaper? How long does it make sense to pay on a policy/or is there a good time to surender it before too long or just pay till you die.
Bottom line, is it best to keep for 23 years or cash out and look for another one??
Posted: Wed Sep 23, 2009 08:18 pm Post Subject:
It really depends on how much the cash value is and if you know for sure when you are going to either die or no longer need life insurance coverage. Talk to an agent who can actually review your current policy.
Posted: Wed Sep 23, 2009 09:39 pm Post Subject:
What state are you in? If you cash out the policy, you may have a taxable gain if the current cash value is greater than the premiums you have paid. You can do what is called a 1035 exchange to a new universal life policy to avoid the tax and lower your premiums on a new policy. Obviously, a new policy will depend on your current age, smoker status, and health. Some of the new UL policies also have a no-lapse guarantee that says as long as you pay the premium, the death benefit will stay in force regardless of cash value. Your current policy may crash when the cash value hits $0 as you continue getting older and the actual cost of insurance increases more and more each year.
Posted: Fri Sep 25, 2009 12:56 am Post Subject:
DON'T CASH OUT!!!!
It might make sense to do it, but you must get approved for a new policy first. Until applying for a new policy, it is impossible to know the exact rates which makes it impossible to know what is in your best interest.
The first question is, "Do you want life insurance?" If you don't surrendering the policy probably makes sense, but the way to surrender it will be dependent on whether there is a loss or gain on the policy.
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