Cancel Your Whole Life Insurance: 3 Reasons Why You Shouldn't

Chances are, if you're watching this video, you probably have a whole life policy in place that you bought earlier for particular reasons, and now you are wondering if it is worth it in the end for you?

The reason is that you wanted to have a death benefit that would take care of your beneficiaries, no matter when you pass away.

Whole life insurance is also a place to store cash where you have safety, liquidity, and growth.

That provides a lot of certainty in your life because you have this store of capital that you can use and leverage for any reason in your life.

As the cash value continues to grow with uninterrupted compound interest, you can take a loan against that policy and put that money to work in another asset. You can get two returns at the same time with the same money. That's why we call it an and asset.

One of the most important features of this is that the cash value's a guaranteed amount that's going to continue having uninterrupted compound growth, so you're never going to reset the compounding and go backward.

Those are some powerful reasons to have life insurance in the first place.

Because of the guarantees, you're able to maximize every other area of your financial life.

If you're considering canceling, and you're saying, I don't know how I'm going to make those premiums this year; I want to let you know that there are so many other options that don't include canceling a policy.

Top three reasons.

1) If you cancel a whole life insurance policy, you cannot resurrect it or reinstate it. You've surrendered your right to the death benefit by giving up the policy. There's no going back.

2) If you did change your mind in the future and wanted another whole life insurance policy or any life insurance product, you're going to pay increased rates just for the simple fact that you're older. It's also possible that if you face any health concerns, you'd have underwriting challenges that might additionally increase your premium or even make you uninsurable.

3) Whole life ages like fine wine. It's because of the compound growth inside of the policy. Compound growth is exponential. In the early years, you have this running start that takes a while to get going but over time, that growth speeds up, so that compound growth inside the policy is going to have the most benefit the longer, you have the policy in force.

Now, instead of canceling, instead of just giving up and saying I need to walk away from this policy and surrender it completely, you have so many other options.

Whole life insurance has a lot of flexibility built-in just for these exact life situations.

Here's a few options for paying your premiums if you can't come up with the dollars out of pocket.

1) Reducing premium to the minimum required, which is usually your base premium plus a little bit or small portion of your paid-up additions rider.

2) Another option would be to pay from policy values. Now, if you have sufficient dividends, you can surrender the dividend to pay the premium or you can surrender cash value to pay the premium so those are two additional options that would further extend the life of your policy or get you through a rough patch, so you could pick up paying the premiums later in the future.

3) Take a policy loan. Now, remember that guaranteed loan provision that allows you to access that cash value? You can use that for whatever you choose, even if it's paying premiums on that same policy. You can choose to pay it off when your cash flow situation changes or not, as long as it doesn't grow so large that it overtakes the policy, which would then collapse the policy.

4) You can also reduce paid-up. Now, what this means is that you're using the cash value to purchase the amount of death benefit that is completely paid up with no further premium required. Reduce paying up a policy would mean that you will no longer have premiums due out of pocket. The death benefit would immediately decrease. Then as time goes on your cash value and death benefit would continue to grow as time goes on.

5) You also could do a 1035 exchange for a new policy

6) Sometimes there is an option to use a life settlement and sell the policy.

You have so many options besides canceling.

Whole life insurance is a long-term wealth creation tool, so don't let a short-term challenge wipe out your long-term vision of what you want to create in your financial life.

That's why you should not cancel a whole life insurance policy.

#cancelwholelifeinsurance #wholelifeinsurance

[ColeB-jymh]

Na those policies suck, just listen to what Dave Ramsey says

[chamasdad]

Whole life insurance "a long term wealth creation tool???" by paying an interest to the insurer for "borrowing" my own "cash value money?

[moiseiscutaru]

borrow against your own money? that sounds genius!

[gobrowns]

How funny that I just saw this video when Im about to cancel my whole life insurance policy completely from New York Life. The premium is just too expensive regardless of how my insurance guy provided all the sizzles... but didnt provide the... hmmm.. real steak. I have insurance through work and my net worth is enough to provide for my family.

[CiecieNewson]

Now to learn to use these points to confidently persuade clients not to cancel their policy. Great information. 🌻

[broste]

Started a whole life policy a year ago and have heard so many people talk bad about it since. The premium is 1K a month, which we can afford, and we were looking for a place to put $$$ that wasn't exposed to the ups/downs of the market. We viewed it as a savings account that would make at least a little $$$ with a death benefit attached. Were we looking at this wrong?

[jackrosario]

But if you borrow from your policy the pay back is like 70% which is like paying back a loan shark! If you want to keep then just pay for it and when you are gone then keep it; if you are 50 years old and kinda healthy get a 30 year term life, but all insurance is a ripe off kinda, because insurance shouldn't be profit driven.

[Goldie-kwju]

I have one policy paid in full and I'm paying on the second policy I want to cancel both of them I have a bad heart and my wife is waiting to collect

[livetodance]

I've heard that the guaranteed rate of return on whole life policies is going from 4% down to 2%. Is this the case?

[davidmoon]

I have a policy loan that grows day by day, $5. I have a blended policy. What do I do?

[oswedeh]

those are terrible products. Its sad you chose to make a living taking advantage of the people naiveness .

[GA-juhf]

This all sounds RIDICULOUS and for people who plan to NOT be millionaires.... Yikes! If only people put this much mental power to learn how to make money, they wouldn't need insurance.

[paulstutsman]

I cringe every time I hear someone tell people to close these things, especially when the reason given is to pay off debt. You have 30 grand in CV built up and you want to cash out? READ A BOOK! you HAVE to have some knowledge of policy loans...

[christopherramirez]

you are leading people down the wrong path, your whole life policy is not what it says it is. do your homework and really look into it. you only need life insurance till all your dependents are on their own. you can buy a term policy for less than half the price and get a lot more coverage, take the rest and invest it in a ROTH IRA and get a much bigger return and be set for your retirement. If you do your homework, you will find what she is saying is NOT true!

[ivans]

Dave Ramsey says not to get whole life insurance

[Conquistador]

Lady you have pretty eyes, distracted me from what you said, lol!