Renwanz Insurance & Financial Solutions, Carlsbad, CA
If you are determined to get out of your variable life insurance policy, you should first figure out if there is any cash value there for you. If there appears to be decent cash value in the policy, you can have an as-is illustration run to see how long the policy will last in its' current configuration with no further premiums. You can get this illustration by calling the customer service phone number for your insurance company.
You can use the cash value in a "1035 exchange" for another policy. I've often found that the cash value from an older policy can fund a new policy at the same or similar death benefit without any further premiums. It costs nothing to find out and you could maintain life insurance coverage without any further expense to you for the rest of your life.
You can stop all premium payments and the policy will eventually lapse. The other option is to simply pull the cash value out and keep it. Consulting an independent life insurance agent who can assist in this process is probably a good idea.
That is a great question. Those are really difficult policies, and as a rule, I don't recommend them, so I can understand why you would want out of it. There can be a whole lot of fees and opportunities to lose money on these policies. Here's what I'd advise you to do. Get with your agent, (or a different one in the company, or another trusted adviser) and determine whether there is any salvageable cash value. If there is, find out if it is better for you to reallocate your funds into safer sub-accounts and run the policy dry, keeping coverage as long as possible; to withdraw the cash and let the policy lapse; or roll it into something safer in a 1035 move. If there's no real cash value, then dropping it will be easier. Good luck, and thanks for asking!
Agent Owner, Gilmore Insurance Services, Marysville, Washington State
How do you get out of a variable life? Well first you should be very certain it's the best thing for you, not something you're being told by someone who wants to sell you a different product. Variable life policies simply require more attention than other policies because of the investment aspect. You're in the stock market with a variable life and you can manage it, if you pay attention. If you just want out of the plan, you simply cancel in writing to the insurance company. They will send you any values (minus surrender charges, if any) left in the policy. While not a big fan of variable life, a person should really see if some changes to the policy fix the problem first.
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Or you can 1035 exchange the policy for a better one that suits your needs.
1035 is a tax code that allows you to exchange one life insurance product for another without a tax penalty.
Variable policies suck. Too many moving parts and hidden fees that are never explained by the agent selling the piece of crap.
You can use the cash value in a "1035 exchange" for another policy. I've often found that the cash value from an older policy can fund a new policy at the same or similar death benefit without any further premiums. It costs nothing to find out and you could maintain life insurance coverage without any further expense to you for the rest of your life.
You can stop all premium payments and the policy will eventually lapse. The other option is to simply pull the cash value out and keep it. Consulting an independent life insurance agent who can assist in this process is probably a good idea.