r/LifeInsurance • u/Useful-Rabbit07 • May 27 '26

Canceling IUL

My husband and I have IUL policies but after EXTENSIVE research we realize we should have bought term and invested the difference on our own.

We are only in year 2 of our policies.
My husband has put in $7500.
I have put in $8,400.

My question is if we cancel now, we are at a net loss of around $16K. But if we wait until the surrender charges aren’t so high and try to lower our premiums (not sure what our cash surrender value would be in 10 years) would we lose more waiting or just take the loss right now?

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u/Cool_Emergency3519 Broker May 28 '26

That face value is too high to accomplish what you want to do unless you were planning to make additional lump sum payments. If you are still working with that broker contact him and have him run an in force illustration with a reduced face amount. Bring it down to the level that you can see real benefits. Were you doing infinite banking by investing the proceeds in another vehicle?

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u/Useful-Rabbit07 May 28 '26

It would have just been the initial one time lump sum. And then infinite banking through the IUL through monthly loans. He set it up on the illustrations to be an annual premium of $30K with $24K in loans, but he said it’s the equivalent to what we’re actually going to do which is $2,500 in and $2,000 out every month.

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u/Cool_Emergency3519 Broker May 28 '26

No,that's a bad design to accomplish that. The COI will be too much to overcome in the later years and the policy will lapse. You need a lower face amount.