Hi Jonathan here is a question that no one seems to want to or have an answer to, I have a whole life policy that i have had since 1983 for $100000
that i pay $61.80 for every month. I took a loan out on the policy about 10 years ago for $8000.00 and now with interest owe about $13000 to pay loan back. I am wanting to know since i do not plan on paying the loan back should i just let the policy go and get a term life policy in the same amount I am 47 years ols and am married in good health and have a 10 year old son
Thank you very muck for any help
I have a couple of questions I would ask.
How long would your new term policy be for? If you let the policy lapse...that "loan" may be subject to income taxes. I would talk to a qualified agent in your area before you make that determination. I did pull up some quick pricing in MD, which is where I am. If all else were equal, it might make sense since the premiums for the same level of coverage on a new 30yr would be about half of what you currently pay. I would strongly urge you to get some advice before you simply let it lapse.
With a permanent life insurance policy , you would have built up a cash value along with your premium payments. When you terminate such a policy, you need to pay a surrender fee in order to access the cash component. Often the surrender value will be less than the total amount of premiums paid over the years. If you have already taken out a loan against the policy and have not repaid the amount at the time of cancellation, you might not get anything in return. Additionally, there may be taxes incurred as well. n case of a whole life policy, you need to get the full picture from your insurance agent. You need to determine how much cash value you will receive if you terminate your policy and how much taxable income will be generated as a result of the encashment. Attached to all of the suggestion listed above are tax ramifications, therefore please speak to a certified financial planner or insurance expert before making any decisions. Denise at AccuQuote Disclaimer: I work for AccuQuote and this is my personal opinion.
Other people asked questions on similar topics, check out the answers they received:
Other people asked questions on various topics, and are still waiting for answer. Would be great if you can take a sec and answer them