There's no doubt about the fact that having life insurance is a valuable investment. However, it is sometimes more logical to surrender your policy or policies and receive a cash payout instead of waiting out the terms. If you have several insurance policies or simply need cash right this second, surrendering can be a beneficial move, though you will have tax responsibilities for the amount you receive.
Step 1
Call your insurance provider and ask to speak to a representative--If they've gone out of business contact the State Insurance Commissioner to see which company has bought out your policy. Surrendering your whole life insurance policy is not something you can do over an automated system.
Step 2
Request that you have your policy cashed out. If this doesn't work, request that you borrow against it. This is sort of like taking out a second mortgage on a home. You're just being lent the money you already put into the policy. But in the case of whole life insurance, you don't have to pay back the money, though it will decrease the overall value of your policy.
Step 3
Sign the forms you're sent in the mail that authorizes the surrendering of your policy. Be sure to double check each line of information, ensuring your name is spelled correctly, that it's signed and that you include the appropriate policy number. Mail everything back to the insurer.
Step 4
Be patient for your check to arrive. It can take several weeks for your policy to be surrendered properly. But when it's complete, you'll get a check in the mail for the full amount.
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