Christian Living


Dave Says: Penalty for Making Change from Universal to Term?

Dave Says
Author Biography

Dear Dave,

Before I began following your advice, I had a universal life policy and it’s not done what I thought it would or what I was told it would do. Right now, it has a $12,500 cash value. I’ve switched over to term insurance since then and would like to get the cash out of the old policy, but I’m still worried about the penalties involved.


Dear Chip,

Just cancel the policy. You may have to pay a small surrender charge, but you’ve got money sitting there accruing at about five percent and a bad insurance policy attached to it. It’s like having a hole in your pocket. You either keep putting money into it or you sew it up. You’re moving in the right direction. The only question now is do you keep a bad product around just because you already bought the thing, and the answer to that is no. I’d cancel the policy, pull the money out and do some good investing in mutual funds.


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