How to Cash In Your Liberty National Life Insurance Policy

Cashing In a Liberty National Life Insurance Policy

To cash in a Liberty National life insurance policy, you typically surrender it for its cash value, take a loan against it, or explore a life settlement. The right move depends on your needs, the policy type, and whether you still need coverage. Contacting Liberty National directly or your agent is the first step to understand your specific options and any tax implications.

Surrendering Your Policy

Surrendering means you end the policy and receive the cash surrender value, which is the accumulated cash value minus any surrender charges and outstanding loans. This is the most straightforward way to get funds, but you lose the death benefit permanently. Review the policy illustration or your annual statement to see the projected cash value and any early surrender penalties.

Taking a Policy Loan

If you want to keep the coverage, you can borrow against the cash value. Liberty National allows policy loans, which accrue interest and reduce the death benefit if not repaid. Loans do not require credit approval and are generally not taxable as income, but unpaid interest can compound and erode the policy's value over time.

Exploring a Life Settlement

A life settlement lets you sell your policy to a third party for more than its cash surrender value but less than the death benefit. The buyer pays the premiums and receives the death benefit when you pass away. This option is often considered for policies with significant cash value where the owner no longer needs or can afford the premiums.

Key Considerations Before Cashing In

• Tax impact: Gains above your cost basis may be taxable as ordinary income.
• Coverage loss: Surrendering or borrowing reduces or eliminates the death benefit for beneficiaries.
• Policy type: Whole life and universal life build cash value; term life typically does not.
• Fees and charges: Surrender charges and loan interest affect the net proceeds.

Contacting Liberty National

Call the number on your policy or visit Liberty National's official site to request a policy value quote. Have your policy number and personal identification ready. An agent can walk you through the surrender value, loan options, and any applicable fees so you can decide whether cashing in aligns with your financial goals.