Solution Provider, Madison Strategic Partners Group, Greater New York City Located, Serving Clients Nationwide
Are you seeking to cash in your policy now because the coverage is no longer needed, you can no longer afford the premiums or you need the cash now?
In general, you need to hold you policy a minimum of 15-20 years in order to have achieved a gain or return on your money that matches conservative returns today (~5-6%). Surrendering your policy before then essentially creates or causes a less than attractive return on your premium dollars for that cash accumulation feature.
If you are struggling to afford your premiums but do have a significant amount of cash value, surrendering your policy is not necessarily your only option. You can set your WL policy dividends to off set your premium costs rather than buying paid up additions. Depending on the age of your policy, the dividends may be significant enough to pay the premium in its entirety.
Additionally, you can use an Automatic Premium Loan (APL) which automatically borrows from the cash value to cover your premiums annually. This of course, will reduce your policy face value with each loan but is a way to preserve some sort of coverage in the event that you are no longer able to afford it.
Lastly, depending upon your age, you have the separate alternative of selling your life insurance policy to an investor in an transaction called a "Life Settlement". The offers that policy owners receive, depending on certain parameters, are multiples of the policy's cash value. You can read more about this through the Life Insurance Settlement Association (LISA) www.lisa.org
Please contact me if you would like more information about a life settlement.
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In general, you need to hold you policy a minimum of 15-20 years in order to have achieved a gain or return on your money that matches conservative returns today (~5-6%). Surrendering your policy before then essentially creates or causes a less than attractive return on your premium dollars for that cash accumulation feature.
If you are struggling to afford your premiums but do have a significant amount of cash value, surrendering your policy is not necessarily your only option. You can set your WL policy dividends to off set your premium costs rather than buying paid up additions. Depending on the age of your policy, the dividends may be significant enough to pay the premium in its entirety.
Additionally, you can use an Automatic Premium Loan (APL) which automatically borrows from the cash value to cover your premiums annually. This of course, will reduce your policy face value with each loan but is a way to preserve some sort of coverage in the event that you are no longer able to afford it.
Lastly, depending upon your age, you have the separate alternative of selling your life insurance policy to an investor in an transaction called a "Life Settlement". The offers that policy owners receive, depending on certain parameters, are multiples of the policy's cash value. You can read more about this through the Life Insurance Settlement Association (LISA) www.lisa.org
Please contact me if you would like more information about a life settlement.