What happens when you cancel whole life insurance? In addition to loosing your coverage there may be tax consequences on the cash surrender value. Check before you do surrender to avoid any surprises.
Before you cancel the policy you should explore other options with your agent. There could be other ways to accomplish your financial planning objective. Perhaps a policy loan, a policy change, or a reduction to name a few.
If you have further questions, or feel that I could be of assistance, please do not hesitate to contact me.
If you would like to work with a local life insurance broker, you could start with a Google search. For example, if you search for: life insurance broker Halifax or life insurance agent Halifax, my name, along with several others, will come up. You can use the same method to find a life insurance broker in your community.
That's a great question! First thing is there is no coverage for you, should something unfortunate happen to you. That would be the worst thing. If you've had the policy for a while, there may be some cash value that could be lost, or have tax consequences, depending upon how you cancelled the policy. If it is just a matter of price, ask to reduce the coverage to an amount that is more affordable, or ask to convert to paid up insurance, and keep some coverage at no cost. If you really need money, and there is a cash value in the policy, consider taking a loan out of it before surrendering ( That's the word you want to use with your agent when you call) the policy. I would be happy to help you, if you'd like more help. feel free to contact me, okay? Thanks for asking!
Co-Founder, TermInsuranceBrokers.com, Goldenzweig Financial Group, Las Vegas, Nevada
You wouldn't have any coverage anymore. Before you cancel any life insurance policy, you should talk to your agent to make sure it's the right move for you.
One of the things that most people don't think about is their insurability, especially when they have an existing plan. They may have preferred rates at the time they got it, but now have a medical history and may be looking at standard or substandard rates on a new plan if they decided to get coverage again later on.
If you're looking at securing new coverage / replacing the old policy, you should compare the two structures and make sure it's the most favorable course of action for you.
Third, if you're cancelling it because of premium affordability, you may have an option to simply reduce the face amount or term period of the coverage to reduce the premiums.
After all proper considerations are done and you still want to cancel the policy, you can do one of two things:
1) simply stop paying the premiums and the policy will just lapse on its own
2) call the carrier and tell them to terminate the coverage (if you have a permanent policy with cash value, you can request to receive the cash value proceeds (less any surrender charges or loan fees), if applicable/available. Please note, depending on the status of the cash value, you may be subject to a tax on the gains under certain conditions.
Please let me know if I can be of further assistance. Thanks very much.
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
A life insurance policy has “non-forfeiture” provisions. They are included in your policy. Consult those provisions and determine the best way to stop paying premiums. Determine which alternative will best suit your requirements. Consult with your life agent and rely on his or her expert advice.
President, Lane Independent Agency, Southern California
You most definitely can cancel your whole life insurance. Cancelling it would result in you longer having life insurance coverage under that policy, but will not affect coverage under any other separate policy. With whole life, you could have accumulated equity in your policy. With cancellation, you will receive the cash surrender value of that policy. Those funds would be taxable. You could instead have borrowed against the policy, kept the policy in force, with a death benefit (reduced by the amount of the loan) and kept the borrowed funds tax free, never having to pay them back if you did not want to. Should you later pay back the loan, the death benefit would return to where it had earlier been and no longer be reduced by the loan amount. Thank you. GARY LANE
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Before you cancel the policy you should explore other options with your agent. There could be other ways to accomplish your financial planning objective. Perhaps a policy loan, a policy change, or a reduction to name a few.
If you have further questions, or feel that I could be of assistance, please do not hesitate to contact me.
If you would like to work with a local life insurance broker, you could start with a Google search. For example, if you search for: life insurance broker Halifax or life insurance agent Halifax, my name, along with several others, will come up. You can use the same method to find a life insurance broker in your community.
One of the things that most people don't think about is their insurability, especially when they have an existing plan. They may have preferred rates at the time they got it, but now have a medical history and may be looking at standard or substandard rates on a new plan if they decided to get coverage again later on.
If you're looking at securing new coverage / replacing the old policy, you should compare the two structures and make sure it's the most favorable course of action for you.
Third, if you're cancelling it because of premium affordability, you may have an option to simply reduce the face amount or term period of the coverage to reduce the premiums.
After all proper considerations are done and you still want to cancel the policy, you can do one of two things:
1) simply stop paying the premiums and the policy will just lapse on its own
2) call the carrier and tell them to terminate the coverage (if you have a permanent policy with cash value, you can request to receive the cash value proceeds (less any surrender charges or loan fees), if applicable/available. Please note, depending on the status of the cash value, you may be subject to a tax on the gains under certain conditions.
Please let me know if I can be of further assistance. Thanks very much.