by Guest » Wed Aug 08, 2012 12:18 pm
My dad has a policy in his name. But now he wants to drop coverage since my mother passed away and he doesn't want to keep paying so much on insurance. What can be done? The policy has been in effect for around 10 years or more. Should he surrender the policy? Isn't there something called settlement? Whom should he approach for that?
Posted: Thu Aug 09, 2012 03:03 am Post Subject:
He should call the insurance company and tell them he wants to surrender the policy. If it's a cash value policy he'll have a few options:
If it' whole life insurance he can surrender for cash surrender value, take a reduce paid up benefit (the death benefit will go down, but he'll be required to pay no further premiums), or he cant take an extended term benefit (death benefit stays in place for a certain period of time).
If it's Universal Life Insurance, he can surrender for cash value only. He could sort of make the other two options happen with UL, but it wouldn't work the same way (you need to have a one on one conversation with an agent if you want more explanation on this, as it goes beyond the scope of this post)
If it's term insurance, there is no cash value, so he would just surrender the policy and owe no further premiums, he does not receive any money.
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