A Power of Attorney (POA) can cash a life insurance policy only if the POA document expressly authorizes the holder to surrender or withdraw cash values and the insurance company's requirements are satisfied. Without that specific language, the insurer will typically refuse the request.
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Key requirements for a POA to cash a policy
- Explicit authority in the POA to handle insurance transactions.
- Policy ownership must be in the name of the person granting the POA.
- Submission of the original POA, a certified copy of the death certificate (if applicable), and any insurer‑specific forms.
Typical insurer procedures
Most carriers require a written request, the original POA, and proof of identity for the POA holder. Some insurers also demand a signed statement from the insured confirming the surrender.
Limitations and exceptions
Even with a valid POA, a lender's lien, a court‑ordered protection, or a beneficiary designation may block cash‑out. Additionally, a limited POA that only covers health care or financial matters other than insurance will not suffice.
When cash‑value is unavailable
If the policy is term‑life with no cash value, there is nothing to cash. For whole or universal life, the cash surrender value may be reduced by surrender charges or outstanding loans.