Cancelling Whole Life Poilicy

[magnate]

Hello,

I currently have a whole life policy now for about 5 years. From reading around, I realized that It's not a good idea to keep, and instead go with a term insurance. Should I cancel the policy, take the cash out to pay down some existing debt? Or do I keep it since I have invested in it for that period of time?

What do I do?

Thanks... Any advice will be very appreciated...

[sweeps]

Short answer: It depends. What are the cancellation penalties? Sometimes it's just too expensive to cancel and you're better off staying in, at least until the cancellation penalties drop or expire. Also are you healthy? Make sure you're approved for good term insurance rates before dropping your whole life.

Having said all that, the average person will benefit a lot over the long term by dropping their whole life. Just be sure to save/invest the premium savings.

[creditcardfree]

Generally, you should first obtain the term life insurance and have the policy in hand before you cancel the other insurance. Keeps you from being uninsured for a period of time.

[buildmybudget]

Another thing to consider, if you have debt, is the interest rates and value of the debt. If you could take a sizable chunk out of your debt, despite a cancellation fee with the whole life policy, you may come out way ahead. Once again, it just depends. I might suggest finding a calculator to determine how long it will take to pay off your debts, how much interest you will pay, and whether the cancellation fee is less.

[red92s]

This "termlifeinsurance" joker is running around responding to every single post about life insurance in an attempt to drum up business. This thread was over three years old! Marginally better than email spamming directly.

[terces]

I did this exact thing a couple of years ago. Like what was posted... first get your new term life policy in effect before cancelling the whole life one.