Cashing in Life Insurance & Annuities Early

Facing bankruptcy or foreclosure can make us do silly things and the fact that we need money so desperately means that we may try anything to get it. Some people will even consider cashing in their life insurance or annuities to pay for it, because they need money so much. If you need money and are considering this then think hard before you go ahead.

Think about the fact that you worked hard to get that money and also think about why you decided to take out those policies in the first place. It was probably either because you thought that you would need money to help you in later life especially if you are unwell and may need to pay medical bills or that you need money to pass onto your children or other family members that will need money in the future. These reasons are likely to still be valid today so think hard whether you really need money now more than in the future.

It can be hard to look beyond your current situation and possibly losing your house and that could feel like the worst possible thing that could happen to you. However, it is likely that you have been struggling for a long time to pay the bills and wondering if you need money to be spent on certain things more than others because there isn’t enough to go around. If you foreclose on the house then you might be able to plan a better future, keep hold of the insurance or annuity policies and have a much better prospect than one which means that you keep your current house but have no future planning and a constant need for money.

By paying into a life insurance or annuity you will have already made a decision about future planning and realized that you will need money in the future and may not have the opportunity to earn it then. Think back to when you made that decision and whether you really need money now so much that you need to reverse the decision that you made then. Try to look outside of the situation that you are in now, perhaps discuss it with other people or a financial adviser to find out whether you really need money now or whether it is better to keep it until later in life. Make sure that you do not end up making a decision that you regret in the future and end up worrying about whether you will need money later in life and where it will come from.

So if you think you need money so much that you need to cash in your life insurance or annuity think hard about whether you need money that much, whether there is another way to get the money and whether there is anyone who can help you think it all through and rationalize whether you need money more now or later in life.