Should you cash in your life insurance policy?

Insurance Pro Group, Inc. serves the residents of Suwanee, GA and many of the surrounding communities. We offer a comprehensive selection of life insurance policies. The type of insurance policy you choose will be determined by several factors, one of which is financial stability. With certain types of policies, you have the option to take a loan on the policy, or if it’s matured, you can cash it in. 

Permanent and Whole Life Insurance Policies

Permanent and whole life insurance policies are the only two types of insurance that allow you to pull from the equity that has been established. Once the policies have reached maturity, they can also be cashed in. Whole life insurance is an excellent way to save money. If the plan is purchased while you are in your 20s and 30s, you may have an impressive windfall by the time you reach your 60’s.

Drawbacks of Cashing Your Policy In Early

The money paid into life insurance policies is tax exempt, which means the equity of the coverage can become extremely valuable if left in the account for several years. You can borrow against the equity or cash out the policy if it has reached maturity. The problem with cashing out the plan is that once the money is returned to you, it’s no longer tax exempt and you will be required to pay a capital gains tax on the proceeds.

In Suwanee, GA, the agents of Insurance Pro Group, Inc. offer sound information to their clients who have life insurance policies and are considering the option of cashing them in. Call the agents today if you have any questions about your existing policy or are interested in taking a loan against its equity. We will be able to provide you with the answers you need to make an informed decision.