i want options on cashing in a life insurance policy that is not paid up
Total Comments: 2
Posted: Fri Jan 01, 2010 03:49 pm Post Subject:
If the policy has a cash surrender value more than 0. You can surrender the policy back to the issuing company for this value.
Posted: Sat Jan 02, 2010 01:09 am Post Subject:
Other options include converting the cash value to a paid-up form of insurance. Those options include a "reduced paid-up" policy (one that lasts until age 100/121) but with a smaller face amount than the original policy, and also an "extended-term" policy which will have the same face amount as the original policy, but last only for a specified number of years and days into the future.
If the cash surrender value exceeds the "cost basis" (the sum of premiums paid less any partial surrenders or withdrawals), surrendering the policy will create a taxable event to the extent that the cash value exceeds the cost basis. This is unlikely unless the policy was heavily funded in the early years or was an exceptionally well-performing variable contract. If the policy is whole life, it is entirely impossible.
Posted: Fri Jan 01, 2010 03:49 pm Post Subject:
If the policy has a cash surrender value more than 0. You can surrender the policy back to the issuing company for this value.
Posted: Sat Jan 02, 2010 01:09 am Post Subject:
Other options include converting the cash value to a paid-up form of insurance. Those options include a "reduced paid-up" policy (one that lasts until age 100/121) but with a smaller face amount than the original policy, and also an "extended-term" policy which will have the same face amount as the original policy, but last only for a specified number of years and days into the future.
If the cash surrender value exceeds the "cost basis" (the sum of premiums paid less any partial surrenders or withdrawals), surrendering the policy will create a taxable event to the extent that the cash value exceeds the cost basis. This is unlikely unless the policy was heavily funded in the early years or was an exceptionally well-performing variable contract. If the policy is whole life, it is entirely impossible.
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