What Happens If I Cancel My Life Insurance Policy?

Many West Chester, PA residents have taken life insurance to protect their loved ones’ financial well-being in case they pass away. However, you might be considering canceling your life insurance policy. Therefore, you might wonder – what happens if I cancel my life insurance? Well, it depends on the type of life insurance you have. 

Term Life Insurance

In most cases, if you cancel your term insurance, you won’t get your premiums back. However, if you took a convertible term life policy, you can sell the policy to recoup some of your premiums instead of canceling it. Additionally, you have a "return of premium" feature on your policy; we at Griffith Insurance LLP advise that you try to outlive the policy’s term rather than canceling it. Your premiums will be refunded if you outlive the policy’s term. Remember that adding a "return of premium" feature to your policy will make it more expensive. 

Whole Life and Universal Life Policies

Since whole life and universal life policies have a cash value component, you will likely receive some cash if you cancel them. However, how much amount of money you receive will depend on the age of the policy. The older your policy, the more cash value it accrues and vice versa. If you cancel your whole life or universal life policy after a couple of years, likely, it hasn’t accrued a considerable amount of cash value. Thus, you may have to incur surrender fees on the cash value, significantly reducing the amount of money you receive. On the other hand, if your policy is decades old, it might have significant gains. However, these gains will be viewed as taxable income if you cancel the policy, which will be taxed, and you will get less money. 

Do you need help figuring out your life insurance in West Chester, PA? We at Griffith Insurance LLP are ready to help. Call us today.

Should I get life insurance in West Chester?

People that are in the West Chester, PA area need to understand and evaluate their personal insurance needs and options. A form of coverage that is ideal for many in this area is life insurance. There continue to be a variety of reasons for the typical person here to get a life insurance plan. 

Provide Financial Protection

A reason that people here will need to get a life insurance plan is so they can provide financial protection to those that they care about. When you get a life insurance policy, you are able to build and size it based on the financial needs of those that rely on you and your income. This can ensure that they will be cared for even if you were to pass away. 

Alternative Investment Option

Another advantage that people can enjoy when getting life insurance is that it is a good investment alternative. One popular form of life insurance coverage is a whole life insurance plan. This is a unique form of life insurance that will allow you to contribute some of your monthly payment into an account that builds with interest. It offers a low-risk option, which can make it a good addition to your investment plan. 

As you are looking for a life insurance plan in the West Chester, PA area, there are a lot of choices that will need to be made. If you are looking for a life insurance plan in this area, Griffith Insurance LLP can offer the support that is needed to build and choose a new plan. Griffith Insurance LLP is able to do this by helping you assess your needs and explaining all options. This will ensure you are able to build a plan that is ideal for your situation. 

What are my life insurance options?

Those that are in the West Chester, PA area are going to have many different insurance needs. One fundamental form of insurance that everyone should consider getting is life insurance. When you get this type of insurance protection, you will be providing financial protection for those that depend on you. If you are looking for a life insurance policy here, there are a variety of different options that you should be aware of.

Term Life Insurance 

If you are looking for life insurance, a great option is to get a term life insurance policy. When you get this type of insurance, you can build a policy that is designed to meet your needs. These policies tend to be more affordable for the amount of coverage you can receive for the term of the policy.

Whole Life Insurance

One prevalent form of life insurance to consider is whole life insurance. This is unique life insurance because it will provide you with protection for the rest of your life. The monthly premium payments for this tend to be more expensive than other options, but this insurance will also be a good investment. A portion of your monthly payments will accrue in an account that you could liquidate or use as collateral for a loan in the future.

One of the most important decisions that you will have to make will come when you choose a life insurance policy. If you are in the West Chester, PA area, you should reach out to the team at Griffith Insurance LLP. The insurance professionals at Griffith Insurance LLP can provide you with a variety of services that will help ensure you get into the right policy. This will provide your dependents with the protection that they need.