Salvaging Loss in a Life Insurance Contract

Salvaging Loss in a Life Insurance Contract

  1. An insurance policy may be underwater if it will lapse before life expectancy if you don't take action.
  2. The cash value of such a policy may be less than what you paid (tax basis).
  3. Surrendering or exchanging an underwater life insurance policy might not be the optimal approach.
  4. Recognizing a loss for tax purposes.
  5. Impact of outstanding loans.

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