Remember all those premiums you have paid over the years on your Whole Life (WL), Universal Life (UL) or Variable Universal Life (VUL) policies? Did you know even life insurance policies have a basis, not just stocks, bonds and houses?
Has anyone ever discussed with you that this basis could be a quick and easy source of tax free cash for you by simply the signing of a service request form?
Most people think about the cash values in the policy because they have taken out policy loans with low interest rates in the past to access cash in this manner. Often, the loans are never repaid and the outstanding loan and accrued interest balance is simply deducted from any policy death benefits paid in the future. This is not the only way, or in many cases the best way to access money from these permanent policies.
For many policy owners if they were to withdraw their basis, or the amount of premiums paid into the policy, the money would be received tax free just like the policy loans are, but there could be a substantial difference in the accounting portion of the handling of the withdrawl affecting future options on the policy.
You do need the help of a licensed experienced agent before you strip the policy clean of any available cash accumulations available. Why? Doing so may require that your resume paying previously ceased WL premiums, you may need to increase current UL and VUL premiums to avoid under funded coverage in future years, or you may not.
Know all the answers and identify your best course of action before you make any drastic policy value changes in advance.
Finally depending on the premium implications of the withdrawals, current dividend policy income streams, remaining cash values, your current insurance needs, present health status, etc. 1035 exchanging remaining policy values for new coverage, or replacing the coverage and taking remaining policy cash after the withdrawal has occurred may or may not be a better overall cash flow alternative for your unique situation.
Without the help of a professional, you will have no way to access the information regarding recent reductions in industry wide life insurance product pricing and the new riders and guarantees that were not even thought of when some of these policies were purchased years ago to even know if replacement is viable, or advisable.
Without help, you will be unable to compare what you have in force today that may or may no longer suit your life insurance needs with all the current life insurance options available that may suit your needs much more advantageously.
An experienced agent will be a valuable resource to guide you in determining what your options are and assist you with implementation of any changes as needed in a timely manner.