Yes, there are several ways to get cash from a Whole Life policy, if it has been in effect long enough to generate substantial cash value.
1) You can cash the policy in, called surrendering it. This gives you the entire cash value, minus loans, fees, and unpaid premiums. But then your policy protection ends. You no longer have a policy after surrendering it.
2) You can withdraw the money you paid in, tax free. This will reduce the death benefit of your policy, but it will not cancel it.
3) You can borrow from it. If you repay the loan with interest, your policy stays intact.
4) If you just need to get our from under paying premiums, you can see if your policy has the ability to pay premiums from cash value, or reduce the face amount so that you no longer owe premiums.
When you bought your Whole Life policy, you were purchasing all kinds of great features that you may not understand. Contacting the agent who sold it to you, or another agent you trust, is a good idea before you cash in your policy. That way you can take advantage of those features you had been paying for all those years.
Yes you may "cash in" or surrender a whole life policy provided there is enough cash value to do so. However, there are some things to consider. Are you certain you do not need the life insurance any more or can at least qualify for another type of life insurance plan? When you "cash out" a whole life plan you are responsible for the taxes on this money over and above the premiums paid into the plan. You should discuss your options with your agent or broker prior to calling the carrier. There are better ways to receive some of your funds tax free.
Insurance Adviser - Broker, SC Insurance Services, Oahu, Hawaii
The only life insurance policies that have the potential to be "cashed in" are the "permanent" type of policies such as Whole Life and Universal Life. Of course a cash value insurance policy only has cash value to be "cashed in" after it has been paid into for some time. If the policy has accumulated cash value in excess of the "surrender fees" the policy may be surrendered or 'cashed in', which will terminate the policy and you will be given whatever remains of the cash value. It may be in your best interest to take a loan against the cash value rather than surrender the policy. You should discuss your options with your Insurance Adviser.
.JPG){kind=avatar}
1) You can cash the policy in, called surrendering it. This gives you the entire cash value, minus loans, fees, and unpaid premiums. But then your policy protection ends. You no longer have a policy after surrendering it.
2) You can withdraw the money you paid in, tax free. This will reduce the death benefit of your policy, but it will not cancel it.
3) You can borrow from it. If you repay the loan with interest, your policy stays intact.
4) If you just need to get our from under paying premiums, you can see if your policy has the ability to pay premiums from cash value, or reduce the face amount so that you no longer owe premiums.
When you bought your Whole Life policy, you were purchasing all kinds of great features that you may not understand. Contacting the agent who sold it to you, or another agent you trust, is a good idea before you cash in your policy. That way you can take advantage of those features you had been paying for all those years.