Variable Life--"Surrender Charge"

[wsmallri]

What is the name of your state? Pennsylvania

Here's the question. I have a Variable Life policy which has been in effect for less than one year. I plan to cancel it and get a different type of policy. I have a Surrender Value of $0. This is because of the short length of time I've had the policy. There is a surrender charge listed of $5,XXX. Yes, over 5 grand. If I just stop paying on the policy, does the company come after me for that surrender charge?

 

[I AM ALWAYS LIABLE]

What is the name of your state? Pennsylvania

Here's the question. I have a Variable Life policy which has been in effect for less than one year. I plan to cancel it and get a different type of policy. I have a Surrender Value of $0. This is because of the short length of time I've had the policy. There is a surrender charge listed of $5,XXX. Yes, over 5 grand. If I just stop paying on the policy, does the company come after me for that surrender charge?

My response:

No. The insurance won't come after you. It's too "dirty" of a job for them to do. They'll just hire Luigi and Joey (the Nose) Gambino to "convince" you to pay.

IAAL

 

[ALawyer]

Actually, you paid it in the first year's premium. Traditionally much of the first year's premium on cash value life is used to pay sales commissions and underwriting expense. It's just that you won't get much if anything back.

You were given a prospectus on the variable life policy and as you probably did not read it earlier, do so now. Also, why do you want to change? Is it the same damn salesman trying to convince you -- so he can earn another first year commission? Or are you getting smart too late and realizing you should have had term all along?