President | Founder, CLM Insurance Group, Delray Beach, FL
When a permanent policy has CASH built up and there are no outstanding loans the insured has options. They can borrow the money from the policy in the form of a loan (some policies require you pay it back, others don't), they can terminate the policy and take the cash (subject to taxes of course), or they can do a 1035 exchange and move that cash into another qualified financial product.
Before any of these actions are taken it's wise to complete a new and updated needs analysis with an experienced agent to determine the smart play with your money.
Great question! Assuming that you are wanting to take the cash value out of the whole life policy that you've had for awhile ( A term policy will not have any cash value at all for you to get) the process is fairly simple. First you want to contact the company, and ask for a surrender form. Once you have filled that out and sent it back in, they will send you a check. There may be a "surrender charge" taken out of the funds, and it can be substantial if your policy isn't very old. If I can help you in any way, please feel free to contact me. Thanks for asking!
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
If you have a permanent policy you normally have two ways to get money out of your policy. The first is an outright surrender. In this you are relieving the company from paying the death benefit in exchange for an amount guaranteed in the policy. The other is through a policy loan, where you borrow funds from the company and pay a nominal rate of interest. The death benefit remains, however, the loan is repaid from the proceeds should death occur.
Insurance Adviser - Broker, SC Insurance Services, Oahu, Hawaii
How can one "cash in" a life insurance policy depends on who you are in relation to the policy. If you are the Owner of the policy you can contact the issuing company and request assistance in surrendering the policy - that is if you want to terminate the policy and collect whatever cash value it might have. So it must have accumulated cash value enough to offset the surrender charges or there will be nothing to "cash in" on.
Another option if you are the Owner is to take a policy loan or a partial surrender of the amount of cash value the policy has accumulated. This you can do without terminating the policy.
If you are the Beneficiary, the Insured must have died in order for you to "cash in". To do that you will need to produce the death certificate and present it to the insurance company along with proof that you are indeed the Beneficiary.
Payment of the death benefit is the longest process of the options listed above. Taking a policy loan is the fastest way to get cash from your policy. And a total surrender will usually take just a little longer than a policy loan.
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Before any of these actions are taken it's wise to complete a new and updated needs analysis with an experienced agent to determine the smart play with your money.
Another option if you are the Owner is to take a policy loan or a partial surrender of the amount of cash value the policy has accumulated. This you can do without terminating the policy.
If you are the Beneficiary, the Insured must have died in order for you to "cash in". To do that you will need to produce the death certificate and present it to the insurance company along with proof that you are indeed the Beneficiary.
Payment of the death benefit is the longest process of the options listed above. Taking a policy loan is the fastest way to get cash from your policy. And a total surrender will usually take just a little longer than a policy loan.