Paying To Get It; Paying To Toss It: Surrender Charges
Whole Life Insurance
Whole life insurance policy holders usually walk away from buying their policy thinking they have set themselves up well for the future. But the question remains: have they? There are certainly competing views about whole life insurance policies, but we have insisted for years that equitable whole life insurance brings nothing but problems, from insurance companies not paying your benefits to entire fraudulent policies altogether. But we have found that perhaps the most perplexing and intense disadvantage of these types of insurance policies are their surrender charges.
Everything To Know About Surrender Charges
Surrender charges are exactly as they sound: they are fees that the insurance company charges you if you decide to cash in on your policy. Typically, as your policy matures, your surrender charge can decrease. However, it is important to understand that these surrender charges can start around 10%. That means, if you bought your policy for $1,000,000, you cannot cash in on your own money without paying a fee of $100,000. To us, and I am sure to you as well, this seems entirely unfair and, honestly, unrealistically steep.
Yet, perhaps the most dishonest piece of the puzzle is that often policy holders are completely unaware of the surrender charge. More and more, we see that policy holders are simply not being told that surrender charges exist, and they would not have known if they had not read the fine print of their 200-page policy. Truly, surrender penalties on whole life insurance policies exemplify the inflexibility and lack of transparency that you purchase when you invest in whole life insurance. A red flag at best, this only confirms our belief that whole life insurance policies are not worth the time and money.
Why This Matters
In Contra Costa and everywhere, frankly, we know that life circumstances change, and so do you. Investing in whole life insurance policies does not only lock up your money, but it asks for a hefty fee in order to take back what was already yours. Think twice and read your policy carefully before purchasing, as nobody deserves to be tricked into investing in something they cannot afford.
Some of the major whole life insurance providers in California are:
- Northwestern Mutual Life Insurance Company
- New York Life Insurance Company
- State Farm Life Insurance Company
- Massachusetts Mutual Life Insurance and Casualty company
- Guardian Life Insurance Company
- Penn Mutual Life Insurance Company
- American Family Life Insurance Company
- COUNTRY Life Insurance Co.
- MetLife Insurance Co. USA
- State Farm Life & Accdt Assr
- American United Life Ins Co. Company
- Sec Mutual Life Ins Co. of NY
- Ohio National Life Ins Co.
- National Life Insurance Co.
Evans Law Firm, Inc. handles whole life insurance and annuity fraud and insurance fraud cases and lawsuits in Contra Costa, CA and in all other counties in California as well. If you have purchased a whole life insurance policy, or are considering purchasing one, and would like to know whether it is a suitable investment for you, contact Evans Law Firm, Inc. at 415-441-8669 or via email at firstname.lastname@example.org. We will review your policy at no charge.