“I feel we made a big mistake without doing due diligence”: Bought expensive life insurance while battling cancer. How can I recover from this costly error?

Hi Money Minder,

So, my wife went ahead and got an IUL plan a couple of months back. We kinda messed up by paying 10k upfront and now we’re stuck with the monthly premium too. If we decide to cancel the IUL, will we lose both the 10k and the premiums we’ve been paying?

Right now, my account shows a surrender value of zero. We bought this during a really tough time when I was dealing with cancer and didn’t really research it properly.

I’m torn between just sticking with it and shelling out $200 a month or cutting our losses and saying goodbye to over 10k. Help!

Oh, and just to clarify, this is my wife’s policy. I didn’t even bother trying to get any life insurance with my health situation.

Farewell,
CancerFighter82

Response from THE MONEY MINDER:

Hello There,

I am sorry to hear about your health crisis and the stress you are experiencing. It is understandable that decisions made during such vulnerable times may not align with your long-term financial goals. In regards to your wife’s IUL plan, cancelling it may seem like a significant loss, especially considering the upfront payment and monthly premiums. It is crucial to assess the overall impact of keeping the plan versus surrendering it.

The surrender value showing as zero indicates that the policy has not gained enough cash value to cover the initial investment. If you cancel the plan, there is a possibility that you may lose the $10,000 upfront payment. However, it is essential to weigh the ongoing premium costs against the potential benefits the policy may provide in the future.

Before making a decision, I would recommend reaching out to the insurance company or financial advisor who set up the plan to get a clear understanding of the terms and conditions. They can provide specifics on the fees, potential surrender charges, and the overall impact of cancelling the policy. Additionally, discussing your current health situation and the financial challenges you are facing may also help in exploring possible alternatives or options available to you.

Ultimately, the decision to keep or cancel the IUL plan should be based on a practical assessment of your current financial situation and long-term goals. It is essential to make an informed choice that aligns with your overall financial well-being. All the best from THE MONEY MINDER.