Need Help on LIFE INSURANCE stuff

**Start-Living** · 07-07-2006, 01:03 PM

HI, I hope you gals don't mind me posting this here.

I need help...pretty clueless about these stuff

BF have a life insurance at work for 2.5 years now, it's the whole life policy and I think there are some money build up in it.

Now, we're switching Insurance. We're switching to TERM insurance with a a different compnay instead.

My question is, HOW DO WE GO ABOUT CASHING IN HIS LIFE INSURANCE? and then CANCEL his life insurance?.

He said he's going to CANCEL it, but once we cancel it, will we still able to get the money that's build up in his life insurance? or will the whole thing just disappear? Or, do we have to pay some fees? (very clueless about these stuff)

I look over his Whole Life Insurance, and this is what I see: (I have NO idea what any of these means) any help/advice will be great. THANKS

BENEFIT SUMMARY AS OF 3/1/06

SPECIFIED AMOUNT:* $100,000 (Includes Account Value)
ACCOUNT VALUE: $622.90
SURRENDER CHARGE: $1,859.40
POLICY DEBT: $0.00
SURRENDER VALUE: $0.00

INTEREST RATE SUMMARY
Annulized Interest rate on borrowed portion of account value: 4.00%
Value: as of: 3/1/05 4.50%
Value: as of: 3/1/06 4.50%

NEXT POLICY YEAR
The net surrender value of your policy WILL maintain the insurance in force until the next policy annual anniversary using the guaranteed interest. mortality, and expense loads and the continued payment of current periodic premiums.

**PrairieRose** · 07-07-2006, 09:33 PM

I think you need to call the company to ask some questions. From what I read they are going to charge you $1859.40 to surrender it or cash it in and your cash value is only $622.90. This is because you haven't paid in long enough on it for it to be worth anything. So if you try to cash it in, you won't get anything and they may try to bill you the difference between the 2. That's my 2 cents worth.

**brainyblonde** · 07-08-2006, 11:06 AM

There is no cash in that policy. The surrender charge exceeds the account value. If your intention is to terminate it, you would be best to stop paying premiums and just let the policy lapse.

It is bet not to terminate an existing policy until the new coverage is active and in force.

**Start-Living** · 07-10-2006, 01:46 PM

so,
In other word, we're stuck with this life Insurance until the Cash Value is the same as the SURRENDER CHARGE......

I wonder if we cancel it, are they going to bill us the difference, and if this is going to be on his credit?

Any of you gals have this happen before?

Any advice/suggestions will be greatly appreciate

**ewokgirl** · 07-10-2006, 04:37 PM

I have no experience with surrendering a whole life policy. My whole life policy was set up by my parents when I was 3 years old. It's a $10,000 policy. I'm now 32, and the policy only has a cash value of a little over $2000now. It takes a long time for those policies to gain any value.

I read that the same way the others read it. You may owe on it if you cancel it. Not sure, though. Call your insurance company and ask about it.

I also highly recommend what Brainy Blonde suggested. Do not cancel this policy until you have coverage in place with a new policy. If your DH has developed any medical conditions (that you're aware or unaware of), it could prevent him from getting another policy. I know this all too well. DH was trying to get life insurance a few years ago, and they required blood and urine samples to make sure he was healthy. To make a very long story short, the urine samples kept showing suspicious results. Several doctors and a kidney biopsy later, we learned he has kidney disease. No one wanted to insure him after that.

So, moral of that little story is to keep your current policy until you know he has coverage with another policy. You just never know... (kidney disease had NO symptoms!)

**brainyblonde** · 07-10-2006, 08:31 PM

This is an interest sensitive policy, not a true whole life policy.

If you stop paying premiums, the monthly cost of insurance & expense charges will deplete the account value until the policy lapses. This means that there is a death benefit payable until that time. How long it stays in force depends upon the charges. Do you have an anniversary statement or annual report? Usually, at the bottom of the report, it will give you an estimate of how long coverage remains in force both at the current interest rate, and at the guaranteed interest rate, whether you continue premium payments or stop paying.

If you surrender the policy, you get $0, and no death benefit. That's why it doesn't make sense. You're just giving the $622.90 back to them. You're much better off just letting the surrender value pay the monthly cost of insurance and expense charges until there isn't anything left.

Did I explain that okay? You can PM if you need any clarification.

Just don't do anything at all until you have your new policy in hand and in force. I work in an administrative capacity in the industry, and many policies are issued other than quoted because of unknown medical issues.