Stopping Life Insurance Policy?
Mini asked:
I just got a question about stopping a life insurance policy.
I just got a question about stopping a life insurance policy.
I own a Universal Life Policy, which now I think is pretty useless and replaced it with a 35-term.
I putted a stop payment on my policy and decided that I will just let my universal life policy deplete itself. The only concern I have is that, will this affect my credit ratings?
Thanks a lot
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Dont think it takes any effect on your credit. Say you stopped paying for your car insurance they will just cancel it cause you didnt pay. I’m sure thats the same for life insurance.
Caffeinated Content
It won’t have any effect on your credit rating; you aren’t under any obligation to pay the premiums. In a standard UL policy, the cost of insurance will simply deplete the cash value until it reaches zero, then the policy will lapse. Have you investigated to see how much cash value is in the policy, or how long it should keep the policy afloat? Precisely, what do you mean by “useless?”
The fact that you’re making these statements and asking if/how you should get rid of the policy says that you probably don’t know much about it. All life insurance decisions should be made with the assistance of a qualified financial planner or advisor. An insurance agent is typically not qualified to provide this level of advice. Find an advisor and make an informed decision. Chances are the person who sold you the policy either lacks the proper background to truly understand the proper funding and uses of UL, or he doesn’t have your best interest in mind.
Also, you stated that you were contemplating a 35-year term policy. Only a very few companies offer such a product. If you are being enticed to get rid of the UL so you can “buy term and invest the difference,” you are dealing with an individual who has been cleverly trained to scam you. It doesn’t matter if he’s your best friend and you trust him completely. He may not be a bad guy; he’s just been brainwashed by a popular MLM company that is a master at it. Run away fast!
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It won’t affect your credit rating.
Since you already have alternate life insurance in place, I’d call and cancel, see if you can get any of your cash value back, rather than letting the premiums eat up the balance. Salvage what you can.
Kansieo.com
Hmmm….first of all, no it doesn’t affect your credit rating. Secondly, how much math did you put into that decision? People complain about those policy because of the HIGH UP FRONT COSTS. But, correct me if I’m wrong….if you already own the policy then you’ve already surpassed the ‘high up front costs.’ Something to think about. I get calls from 50 and 60 year olds all the time that no longer have life insurance because they bought term. I own it too, but it’s not the only thing I own.