Yes, you can cash in a Universal Life Insurance policy. Actually you are talking about surrendering the policy. When you surrender a policy you no longer will have life insurance coverage and if there is any cash value in the policy you will receive the surrender value as well.
A word if caution. ...this could create a taxable event if the cash value you receive is greater than the premium you have paid.
Also, consider your current health and age. When you apply in the future the premium will be higher and if your health is not as good you could find yourself uninsurable.
Yes, you can cash in a universal life insurance policy. Or you can borrow from the cash value, which can keep the death protection intact.
There are old UL policies that were projected to last a lifetime at a level premium due to high interest rates, but now are requiring higher and higher payments because interest rates are so low. The best way to know whether to cash those in or not, is to see what a new permanent policy would cost. New UL policies can be guaranteed to last a lifetime at the same premium. If you are still healthy, you may be able to get a guaranteed no lapse UL for about the same premium you are paying now. If your health is poor, you can perhaps reduce the face amount of your universal life policy to extend the years it will last.
President, Lane Independent Agency, Southern California
Universal Policies which have actually accrued a cash value (equity) can certainly be cashed in. Most older policies do not have cash value, since they were based on the days when interest rates were high. If yours does have cash value, because perhaps you paid in extra amount, known as over funding, they you may wish to do that, but whatever growth you have will be taxable. You would be better off perhaps in working with a knowledgeable agent who may be able to do a tax free exchange for you into a better policy for your needs. Gary Lane, Registered Representative and Agent, New York Life, 949 797 2424. Thank you.
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A word if caution. ...this could create a taxable event if the cash value you receive is greater than the premium you have paid.
Also, consider your current health and age. When you apply in the future the premium will be higher and if your health is not as good you could find yourself uninsurable.
There are old UL policies that were projected to last a lifetime at a level premium due to high interest rates, but now are requiring higher and higher payments because interest rates are so low. The best way to know whether to cash those in or not, is to see what a new permanent policy would cost. New UL policies can be guaranteed to last a lifetime at the same premium. If you are still healthy, you may be able to get a guaranteed no lapse UL for about the same premium you are paying now. If your health is poor, you can perhaps reduce the face amount of your universal life policy to extend the years it will last.