How to Cash in Your Life Insurance Early
Life insurance policies that build cash value can be cashed in early. You then receive the equity value of the policy, which is a cash reserve representing a return of your premium payments plus additional interest. The interest credited to the policy depends on the life insurance company you purchased your policy from and the interest-crediting mechanism outlined in the policy itself. If you're going to cash in your policy early, you'll need to know the proper way to do it.
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Things You'll Need
- Life insurance policy or most recent statement
- Policy number
- Policy termination paperwork
Instructions
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Gather your most recent life insurance policy information, including your most recent statement. This will detail the available cash value balance. Make sure there is cash value available in the policy before cashing in the policy. If the surrender charge listed in the policy or on your statement is more than the total cash value in the policy, you have nothing to cash in.
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Contact your life insurance company and request policy termination forms. These forms direct the company to terminate your policy and send you the cash value amount that is left on deposit with the company.
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Fill out the forms and turn them in. Include your name, address and Social Security number. If you have more than one policy, specify the policy number so the insurer knows which policy to cancel. When you turn in the forms, expect to wait a few days for the paperwork to be processed. If you haven't received your policy's funds within four weeks, contact the insurance company to verify that there was no problem processing your paperwork.
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