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The present economic recession seems to be finding its way through to everyone’s pocket now as over the last few weeks many questions reached my desk as to what I recommend they do with their policies and investments. Fortunately there are temporary and permanent solutions.
In terms of your risk policies – recommend that you do not cancel that at all but that you do look at alternative premium options and even change insurance companies in order to get better value for money. Remember that the risk insured by your before are still out there. Just also do remember that all life policies carry a suicide clause - policy need to be more than 2 years old before such benefits would be paid out. Some of the older policies has cash values you could access free of tax – net effect might be a reduction in your insured benefits.
Your investments need as much attention. Most Insurance Companies would allow you a “contribution holiday” being mostly 3 months. You must apply for the benefit. Your debit orders would then be held back for 3 months after which your normal contributions would be called for – just some breathing space. But you could also make your policies paid up – no more contributions till you are ready and then you could simply carry on again. Note that if the policies, such as the old Universal policies, had risk benefits linked to them you may have penalties inflicted – paid up value be less than investment value before the change.
Lastly always always talk to you broker/advisor before these actions. He/she would be able to ensure you minimum impact on your portfolio but maximum benefits to your pocket.
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