Hello all,

I currently have a Univ. Life policy w. my insurance co. Thru my work I also have a life insurance policy that was part of the benefits package. Reason why I am thinking about canceling is the fact that I already have a policy thru my work

Here are some #'s

Balance frm 2004 $875.42
Payments $360.00
Interest Credited $ 42.94
Expense Chrgs $ 78.00
Cost of Insurance $ 61.32

Bal as of Sept 2005 $1139.04
Interest to be earned $ 4.39

Total $1143.43


My question is based upon the #'s is any of these amounts taxable? Also if I was to surrender would I get back to me the total amount minus any surrender fee or is that not how it works.

Thanks

In all of this, you never gave any indication that you needed any kind of life insurance. Since you may or may not, and you are already covered via work, then this policy is redundant. I'd suggest cashing it out. You might not get much of the balance back, but at least you would cut off the monthly bleeding. If you do need additional insurance, look at term. You can get it for about 1/10 what this policy is costing you.

-john-

The redundant policy is the one through work.

The employer could cancel that policy tomorrow if it is deemed too expensive and the conversion policies that are offered are usually not very good.

The OP needs to review his situation and get the right coverage. Term is good for things that have a specific time frame, a mortgage for example. Permanent insurance is good for covering long term issues that have no definite time frame.

Quite obviously, I am in no position to advise you as to whether or not to retain the policy, as I do NOT have SUFFICIENT information to make that determination. However, I will point out a few things:

a) using YOUR figures, it would appear that the NET COST of the contract for the year amounts to $91.99. Not knowing the amount of the Death benefit, nor your age, I do not know if that is good or bad.

b) Any insurance on your life "paid for by your employer", whether charged back to you or not, is NOT directly under YOUR control. That contract could be changed or eliminated on a moments notice. Add to that the fact that YOU might leave the company, OR that the company might leave you, then you would LOSE the coverage.

c) None of the accumulation "inside of the contract" is currently Income Taxable to you. Should you DIE, it would not be taxable to your Heirs. Should you someday decide to surrender the contract, then any GAIN over and above ALL PREMIUMS PAID IN TO DATE, would result in a taxable gain to you.

d) last but not least, should you surrender the contract (and I do NOT advise that without a great deal of consideration), then you would receive the Total Value of the Current Cash Value Account, LESS the applicable Surrender Charge.

Cal Lester CLU

I dont think you need to pay for the tax here. Your work place will do that for you. However you are planning for something different here. If you surrender you will get the full amount. So, what ever you are planning do a little digging before it.

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http://www.dirtymouthapp.com/

Many large employers provide some life insurance for employees. A typical plan pays a $50,000 or $100,000 death benefit, or an amount equal to one or two years of your salary.

If you need more and are younger than the average employee where you work, you might be better off keeping the insurance policy from the insurance company rather than through your employer.

However, if you are older than the average employee where you work, the opposite is true. That’s because group term life is rated based on the ages of all the employees in the group and each employee is then charged according to that rate, regardless of age.

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Payday Loans

Think about getting a term life insurance policy. They're much cheaper and don't disappear when you change jobs. Use it to supplement your employer-based life insurance.