Why Life Insurance May Be Unwanted?

·The owner has borrowed too much of the cash value of the policy for it to be self-sustaining. This usually happens with retirees who have ended up using the policy as a source of retirement funds, or who have had some unexpected event occur that required them to draw down the cash value of the policy.

·If the investment performance of a variable policy was very bad in the early years, the policy will not perform as predicted. Those who bought variable policies from 1999 through 2001 can probably relate to this.

·Too many unscrupulous life insurance agents have put their clients into policies that, in retrospect, were doomed from the start considering the clients’ situation and cash needs.

·Another type of “failure” is that for whatever reason, the life insurance is no longer needed. The intended beneficiary may have died or been disinherited, or for estate tax planning reasons it no longer makes sense for the policy to pay out as planned, such as that the estate no longer needs insurance for liquidity.

·A company’s key executive could retire, thus ending the company’s need to maintain insurance on his life. A business could fail, be dissolved, or go public, thus eliminating the need for Buy-Sell Arrangement backed with insurance.

·An individual policy is being replaced with survivorship insurance.

·A better insurance or financial product for particular circumstances has become available, but for whatever reason the existing policy cannot efficiently be “rolled” into it.

·The policy is no longer affordable, or the owners need relief from the monthly premium expenses.

·The owners need cash now, such as for a medical emergency or to assist a child or grandchild, or they need cash to supplement their retirement income. Also, the owners want a higher cash payout than the cash surrender value.