Is a 1035 exchange a good idea for life insurance?

Question

It would allow me to wipe-out a loan and reduce my premiums. I can no longer afford the high premiums on existing policy. Benefit is the same. I cannot afford premiums anymore.

Answer 1

This is a great example of why a 1035 would be good. You're going to eliminate the debt and lower your premiums, but get the same death benefit. Are you going from a variable policy to perhaps a UL policy? Just curious ...one caveat: watch the surrender schedule. With a new policy, depending on the type and manufacturer, you could be getting yourself into a new surrender schedule, which could be as long as 12 years (or more!, depending on the company).

Answer 2

The loan never has to be paid back so just pay the interest once a year and forget about the loan balance.

The dividends are probly enough to pay premiums, but is this a UL  or a variable policy or whole life?  The type of policy you have would determine what you should do?  Please provide this info in order to better help.