Cashing in life insurance

Question

Can I cash in my life insurance at any given time if its whole? If I do cash it in am I allowed to start a new policy somewhere else?

Answer 1

You can, but talk to a broker first because the first step would be applying for a new plan...not cancelling the old one.

And, it may or may not be in your best interest to cancel it.  You could just take a "paid up" policy which would reduce the face amount to an amount where you'd owe no more premiums.  You could roll the cash to a new policy, you could roll it to an annuity, etc...   You have many options.

If you want quotes for insurance use the tool on my site as it quotes 10 different kinds of plans from ~150 different companies and requires no personal information to use....

http://insurancepickle.com/life-insuranc...

Answer 2

You can cash it in according to the policy terms.  Read them.

If you want a new policy, you apply all over again and go through the underwriting process.  You can't reinstate a canceled policy.

Answer 3

Read your policy to see how soon you can cash it in (surrender it) and whether there are any surrender charges.  But you should only do that if you have the savings to no longer need insurance, because there may be income tax due on any gain beyond premiums paid into it, or medical conditions could change your ability to get insurance.

If you still want insurance, you can transfer the policy to a different insurance company with no tax implications at the time (1035 exchange).

Answer 4

You can cash your whole life insurance at any time.  As to how much cash you will have available is another story.  In the early years you will not have very much.  

You will be allowed to apply for coverage somewhere else or even at that same company if you want.  Most would recommend applying for your new policy first to make sure that you qualify for the new policy you want and then cash out your old policy once the new insurance is inforce.  You don't want to cash out your policy and then find out you don't qualify for reasonably priced life insurance anymore.