Can you cancel a life insurance policy?

General
1

I bought a whole life insurance policy in May of 2019, but I am not wealthy and don’t expect to be. I recognize this was not a wise decision. The policy has a $201 monthly premium with a death benefit of $250,000.

To date, I’ve made 55 monthly premium payments totaling $11,055. However, the cash value of the policy is only about $3,650. I intend to open a new term policy with a higher death benefit and much lower monthly premiums. I’m a 31-year-old healthy male (non-smoker). Once I have the new term policy in place, I plan to cancel the whole life insurance policy, take the cash value, and redirect my contributions to my Roth IRA.

Is this a sound plan? I regret not realizing sooner that I could have been investing this money elsewhere, as whole life insurance is a poor investment for someone in the middle class.

I’m eager to learn more about finances and self-improvement, so any advice would be greatly appreciated.

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It makes sense to cancel the whole life insurance and put the cash value into your Roth IRA once you have the term life insurance. It lets you move those funds to a choice that might grow faster.

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3

Hello :wave: A life insurance coverage can be canceled, yes, the terms of your policy and the type of life insurance you have whole life or term life will determine the cancellation procedure and its consequences. You can contact your life insurance company with a written notice and advise them you are ending the policy .

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Canceling term life insurance is easy. You can either tell your insurance company in writing that you want to stop the policy, or you can just stop paying your premiums.