Life Insurance » Don't Drop Your Life Insurance7654321 Switch from perm to termInstead of going without insurance, Hutchison says cash value policyholders can trade a permanent policy for a cheaper term one."If you have a permanent policy, you can always surrender it for cash value," says Hutchison.Hutchison warns that surrendering a policy means that policyholders can only pull the current cash value of the account minus any loans or outstanding premiums. Money pulled out of a permanent policy can also have tax consequences. While most of the money you pull out will simply be premiums you paid into the policy, any funds above that amount -- for example, if your policy has performed particularly well -- will be taxable income.7654321 Share this story LinkedIn Delicious Reddit Stumbleupon Email story More on Insurance: Life insurance after 50 and 60 Does your toddler need life insurance? Life insurance from marriage to midlife Create a news alert for "insurance"
Life Insurance » Don't Drop Your Life Insurance
Instead of going without insurance, Hutchison says cash value policyholders can trade a permanent policy for a cheaper term one.
"If you have a permanent policy, you can always surrender it for cash value," says Hutchison.
Hutchison warns that surrendering a policy means that policyholders can only pull the current cash value of the account minus any loans or outstanding premiums. Money pulled out of a permanent policy can also have tax consequences. While most of the money you pull out will simply be premiums you paid into the policy, any funds above that amount -- for example, if your policy has performed particularly well -- will be taxable income.
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