by Guest » Fri Nov 15, 2013 03:49 am
My parents got a life insurance policy on me when I was six years old. And now that I'm approaching my twenty-first birthday, the insurance company says that because I am of age I have to transfer the account into my name else it will expire. The only thing is, I already have around $75k worth of life insurance through my job. I guess my question is, will I be able to cash out my previous life insurance policy now that it's nearly expired? Simply because I do not wish to pay for two separate policies. Thanks!
Posted: Fri Nov 15, 2013 04:24 am Post Subject:
will I be able to cash out my previous life insurance policy now that it's nearly expired?
Yes, the policy is almost certainly a cash value contract and has a small amount of cash available to you (if it's a typical policy, probably not more than a few hundred dollars -- figure no more than about 15 years x $25 per year, or about $300 to $400). How much different will that make your life?However, at age 21 (or maybe 25) the policy death benefit will increase probably double or even as much as five times the original amount of death benefit, but with no increase in premium. That could be a pretty good value.
Additionally, many of the "baby life" policies are also fully paid up after 20 years of premium payments, which means that you might only have to pay $25 or so per year for another four or five years, and will have a permanently paid up death benefit.
Before you know all the details, you should not cancel the policy. You could be looking at nice little "gift" even though it won't have hundreds of thousands of dollars of value.
But why give up something that will only result in a profit for the insurance company (which is exactly what they are hoping for)? Beat them at their game. It won't cost you very much at all.
I already have around $75k worth of life insurance through my job
Are you planning on working there forever? I doubt it. Thirty days after you leave that employer, you will have $0 worth of life insurance. Then what? Buy a new policy at a later age at a higher premium, that's what.Besides, are you only worth $75,000?
Posted: Mon Dec 16, 2013 08:03 pm Post Subject:
Before you go cash surrendering this policy, please sit down with an agent so he or she can give you all your options. You may be able to roll the cash value into an annuity the will build and grow for your retirement.
Posted: Tue Jan 07, 2014 08:14 am Post Subject:
I have to agree with Max.
I bought 20 Payment Life policies on 3 of my daughters when they were around 5. When my oldest turned 21, she asked if she could have the $433 out of it. I told her the policy was hers and she could do whatever she wanted. If she left it alone, I would continue making the premium payments until the policy was paid-up. Then, she's have a $50,000 policy for the rest of her life - and never have to pay for it. The cash value would continue to increase every year and all she had to do was leave it alone.
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