What Is The Penalty For Cashing Out A Life Insurance Policy?
0 POINTSContact Meview profileDavid RacichPROFountain Hills, ArizonaThe Penalty for Cashing out a Life Insurance Policy could be the policy surrender charge which can be punitive in the early years of the contract. If the life insurance policy has cash value gain, then an ordinary income tax event will ensue, including any constructive receipt of policy loans or internal policy loans. And if the policy is a Modified Endowment Contract that is “cashed in” or surrendered or lapsed and the policy owner is under 59 1/2, an additional penalty will be added as well. Consult with your tax adviser before moving forward with any withdrawals, surrenders or policy loans.Answered on June 23, 2013+01+1 this answer
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