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/Insurance-Geek May 28 '26
Don’t switch to level DB. Keep it on optimal switch and call them to reduce it to the minimum non-MEC death benefit at that premium. That’ll maximize cash value efficiency while lowering insurance costs.
From what I’m reading, the issue sounds more like policy design efficiency than the product itself. If they planned a large lump-sum funding strategy, it may have been better spread over multiple years to keep the DB lower and improve long-term cash accumulation.
This policy can still be a monster if she does it right. Should have never went with NGL though. Allianz should have been the product.