1st, do not cancel the policy until a new one is in place.

2nd, do a 1035 exchange so you don’t face potential tax consequences.

It will lock it up into an annuity or variable annuity, but you also wont have the tax issue. After the exchange, take the difference you were paying and pay that into those 2 accounts. Better rates with lower fees.

3rd, above all else, talk to a financial person local to you to discuss all things related to this. Only then can you make a truly educated decision.

Don’s answer is only good if you are sure you will live long enough to save up enough to equal the death benefit. When are you going to die? Not sure??? well, then maybe you should keep yourself insured.

Each case is different. DO NOT make your final decision based on what you read here! This is too important; find a Certified Financial Planner that you can trust to help you evaluate your needs and goals and find the best strategies to get you there.

If you choose to cancel the contract you will have to complete some paperwork.

All insurance contracts are what are none as unilateral contracts (A one way contract). As long as you keep paying into it the company has to abide by what is in the policy, however they can’t force you to keep it. There would likely be some paperwork that requires a siganture to cancel it. Aside from the Surrender Charges there shouldn’t be any hidden fees, however all the ‘fees’ to cancel will be outlined in your policy that you have.

As for whether it’s a good idea or not, it really depends on why you have it and how well you feel you can invest it. Many that use the Buy Term and Invest the Rest fail with that strategy becuase 1) they don’t have the disapline to actually invest the difference and end up spending that extra money eventually and 2) don’t have the knowledge to wisely choose the right investments. Not saying it’s a bad strategy, it just isn’t a 100% sure bet as some companies or TV stars (I’m referring to the Suze Orman’s and Dave Ramsey’s of the world that are on TV becuase they are charismatic and entertaining, not becuase they give good advice all the time) would lead you to beleive.

It is not hard at all. Just call the company and tell them of your decision. They will send you money that you have coming. Invest that money along with what you will be saving on the new premium and you will be lot better off in 20-30 years than with the policy you had. Good Luck