should I keep policy

[rckhenning]

What is the name of your state?
il
I have a universal life policy that I borrowed all the cash value on. I filed bankruptcy and have no extra cash to continue paying for policy. the intrest due each year just eats up what the savings put in each year are. since i cant repay the loan, and the interest will keep eating away at the policy, should I just cancell the policy?? what options do i have?? I think it is a waste to continue with monthly payments when the interest due each year just takes away the cash value. what can I do to turn this around if not advisable to cancel the policy?

 

[Betty]

What is the face amount of the policy & how much do you still owe on the loan? Thanks.

 

[rckhenning]

face value is 200,000
cash value is 18,127
loan balance is 15,947
surender value 2,179
interest this year 1,180

 

[Betty]

If you would pass away, the face amt. would be paid minus loan & interest. That would be quite an amt. of money for the beneficiary. However; if you have no extra cash to pay on pol. or on loan, you may have to choice but to cancel. Maybe you could take out a cheaper policy - such as term insurance. You might want to discuss your options with your ins. agt. before taking any action.

 

[Betty]

OP - re my info above, I might mention if you were to cancel (surrender) your current pol. & take out a new term policy, you would have to submit evidence of insurability & premiums would be at your current age. (though still less expensive unless you have a medical condition or something that would require a high prem.) Also, if you would request (if your co. allows it) a change (rather than a surrender) of your Univ. Life pol. to a term policy, you would also have to submit evidence of insurability since you are changing to a lower prem. plan & the co. is getting less money. Your agt. can tell you all about this.