Cashing in a life insurance policy can be a great source of funds in an emergency, or even for use as a savings account for the ultimate vacation. By cashing in your high-interest life insurance policy, you can use the money for whatever you like!
Know what kind of policy you have. The type of insurance policy you are going to cash in will determine whether or not you will still have a policy left at all. Most whole-life policies will be void after a cashout, while most universal-life policies are able to be cashed out anytime there is enough money in the cash fund. Of course, if you have a term policy, you're out of luck, because they don't earn cash value.
Call your insurance agent. Most of the actual legwork will be done by your agent. He will be the one to actually submit the surrender documentation, and will tell you whether or not your policy will be voided after the surrender.
Prepare your tax documents. See your accountant to find out how surrendering your cash-value life insurance policy will affect your tax situation.
Choose your method of deposit. Your agent will need to know if you want the money deposited directly into a checking or savings account or if you prefer a physical check. Consider the electronic option, as it will cut down on legwork for your agent. After all, a happy insurance agent is an attentive insurance agent.
