Early termination of life insurance

Early termination of life insurance – You have decided to terminate life insurance? Early termination of the contract is the courageous decision that you may come dearly. From their money in certain cases, you do not get a penny .

Commit to saving the life insurance is easy. However, the termination of such agreement will bring a wide range of concerns. Especially in the case of insurance that covers part of the savings . Typically, it is a capital investment or life insurance . The first problem arises with the fact that insurance companies will not pay the full amount , but the surrender value. Under certain conditions, you will not see their money from nothing. The second problem is related to taxes and an additional return of readings . If you want to end term life insurance , so you avoid tax returns .
No problems there is no only if you want to end the life insurance within two months of the conclusion of the insurance contract. You can cancel for any reason.

Surrender for early termination

The amount that will be paid in the event of early termination of the insurance contract , far below the total accumulated amount. The surrender value depends on the parameters and the length of the fuse cover . The biggest disappointment you experience when you stop insurance after a relatively short period of saving . In the first years of the surrender value reaches a minimum value. So it may happen that two years of honest payment will not get a penny . The reason is that in this period, most of the money goes to cover , the high costs associated with the establishment and maintenance of insurance. Investment Life insurance is a long term product that begins to make money in the long run .

Dante’s Inferno tax

When you receive a truncated portion of the saved in the form of surrender, followed by payments to the Treasury. The settlement must occur in the year in which the termination of the contract . The law says that in case of termination of the insurance contract must subsequently return the amount by which you were previously reduced tax base. Tax roller coaster continues. Next stop is called income tax . The tax base is determined as the difference between surrender and return of premiums, which taxes 15 %.