Life insurance is one of the popular insurance packages today, bringing long-term investment value. But also because of the long term of the contract, will there be any impact if the life insurance is withdrawn early?
So let's answer the question of early life insurance withdrawal: should or not? Please refer to this article of Manulife.
Should I withdraw my life insurance money early?
Maintaining insurance until the end of the policy is what anyone who takes insurance wants. Because, then you will enjoy the best benefits, exactly as the signed contract. Therefore, not to withdraw life insurance money before maturity is the advice of many consultants for customers.
However, not everyone can guarantee that process. In case of force majeure, for many reasons, you need to recover capital, early withdrawal of life insurance is completely possible according to the regulations of the insurance company and according to the terms of the contract signed previously.
You can consider early withdrawal times as follows:
Withdraw in the first 2 years from the contract signing
During these 2 years, if you cannot continue to participate in life insurance, you can stop participating in insurance. And of course, the early withdrawal of insurance in the first 2 years, we will not receive or receive very little premium paid as well as insurance benefits in the policy will not be guaranteed.
Withdraw after 2 years and before maturity
According to life insurance policies, after 2 years from the beginning of payment, the new insurance will have a refundable value and will increase each year. If you withdraw during this period, you will receive a certain amount, which will usually be lower than the amount originally closed.
If you have to withdraw, you should consider waiting until the middle of the insurance period, the new refund will be equal to the amount paid. Early withdrawal of life insurance money at the earliest time, the customer will be disadvantaged.
Withdrawal of life insurance money at maturity
If you withdraw in accordance with the provisions of the contract signed with the insurance company, you will receive the amount according to the terms and conditions and depend on the value of the contract, the type of insurance product initially joined.
If you are in need of early withdrawal of life insurance, customers can refer to the following methods:
Withdraw money from contract account value
The value of the contract account is the accumulated value of your money, including the initial payment and interest (if any) and minus the costs to be paid during the insurance participation.
Normally, in order for customers to be able to withdraw the contract account value, the joining period must be greater than 2 years. And of course, the guest is the one who is completely responsible for the withdrawal fee of the copper account contract value. Depending on the withdrawal period, there are different fees.
Advance account value / refund value
Refund value is understood as the amount of money the insurance customer receives at the end of the contract period. And customer can withdraw money by advance from the refund value.
Conditions for advance account value include: advance not more than 80% of the account value and the life insurance buyer has been more than 2 years from the effective date of participation.
Liquidation/cancellation of the contract ahead of time
If you want to withdraw the entire contract value, there is still a way. That is you and the insurance company agree to liquidate/cancel the signed contract. Upon written notice, you may receive a refund of the amount owed and premiums for previously paid insurance benefits.
Some notes when withdrawing life insurance early
According to the above information, you should not withdraw the entire contract value by canceling the contract. Because your rights will be affected and the loser is the customer who buys.
In particular, if customers buy life insurance for example with a 15-year contract period, but have only joined for 10 years but want to terminate the contract, the customer's benefits will be lost forever after when the contract ends.
Each insurance company will have different rules about early withdrawal of life insurance. Therefore, please contact an insurance consultant to answer more specific questions. All decisions must be in writing to be considered effective.
In short, withdrawing life insurance money early is similar to withdrawing bank savings before maturity. Benefits are lost quite a lot, even lost the paid insurance money. Therefore, before deciding to participate in life insurance or withdraw insurance, customers must really consider carefully.
