Affordable Life Insurance Protection for Your Family
If you are purchasing a term life insurance policy or already own a policy, you may be wondering if you can cash out your plan and get money back.
It’s a common question, especially in the world we live in today, with a pandemic and other financial considerations becoming more and more a part of our daily lives.
You cannot "Cash Out" a term insurance policy, because a term life plan does not have any Cash Value inside the policy.
The premiums you pay for your term policy are for the life insurance protection.
There is No Cash Value that builds up inside a term life plan.
Term life insurance is Pure Protection, not an Investment.
Can I Cancel My Term Life Policy?
Yes. You may cancel your policy at any time by contacting your agent or insurance company by phone or in writing to request cancellation. Or, you can stop paying your premiums.
If you have paid up your policy in advance, for example, annual premium payments made, then you would get back a Pro-Rated portion of your premiums that have not been used for your coverage. Otherwise, you do not get any cash from your term policy.
Term Life vs. Permanent Life Insurance – Cash Value
Permanent (Whole) life insurance provides lifetime coverage and builds cash value inside the policy; as well as, providing a death benefit. It usually costs up to 5-10 times more for the same amount of life insurance compared to term life.
Once the permanent policy has accumulated enough cash value, you can use it to pay premiums, or you can borrow against the value in your policy.
However, term life does not include a cash value account. It's pure life insurance protection.
That means you can't borrow against a term life policy or surrender it for any cash value.
Whole life insurance policies may pay out the cash value when canceled, minus penalties and fees, but not a refund of premiums.
Conclusion: Term life cannot be cashed out because there is no cash value inside a term insurance policy.
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