Can I liquify a Life Insurance policy?

This post has 5 comments

• 
  mbrcatz17
  November 28th, 2008

  Life insurance isn’t an investment, so it shouldn’t be part of a portfolio.

  If you don’t have a goal that this policy is acheiving, then get rid of it.

• 
  Rich
  November 29th, 2008

  Life insurance should not be part of your investment portfolio, BUT it is part of your financial plan. Before you make a quick decision, go back and look at why you originally took out the policy. If your unsure, talk to the advisor that helped you make the decision. And never cancel a life policy until you have other coverage in place. You never want to be without coverage.

• 
  Bright Future Penguin
  December 2nd, 2008

  Hi, your friendly insurance guy here, again!

  A little humor - to liquify a policy, stick it in the blender with some Vermouth and turn it on.
  Ok, serious answer:
  If it is a cash value policy you can liquidate it any time you want. There are two main ways you would do it.

  1. Call the insurance company and request the forms needed to surrender the policy. You return the papers, they process them, cancel the policy and mail you a check for the cash value less surrender charges and loans, if any.

  2. Exchange it for an annuity. Most cash value life insurance can be exchanged for an annuity (a series of periodic payments, usually received monthly for your entire lifetime.) I generally recommend against this option.

  Beofre surrendering the policy, find out if you are still insurable. Do a proper needs analysis with a good, reputable, local independent agent. Then find out if you can qualify for that amount by applying for a new policy and having the medicals done. If you get approved, figure out if getting a term policy will suit your needs. That may allow you to keep the same amount of coverage while paying enormously less.

  That’s probably your best option if you actually have a need for life insurance. Feel free to message me with any questions you may have, I’ll be happy to help.

• 
  Do the Right Thing
  December 3rd, 2008

  If there is cash value or investments in the life policy, you can surrender the life policy. You may owe surrender charges on them and maybe even taxes.

  If you don’t pay your premiums, the insurance company will use your cash value to pay for it. So, if you want to cancel the policy, you have to call them up.

• 
  spool32
  December 4th, 2008

  Take a loan against the cash value and have the policy pay for itself until it depletes, if it ever does. I cant give advice on taxes but check with your accountant on that part, it might be a good idea to use this approach

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