Should We Take Surrender Penalty Fees?

Q: I read your article...

What if we already paid $8,000 into a variable life policy (each policy). If we get out now, our surrender charge would be $4,000 (each policy). Do you advise this?

A: Once you're in one of these it's a matter of finding the best way to manage it. You need to look at the penalty versus what you would earn on other investments. If your penalty is 25%, and you only earn 3% more somewhere else, it will take over 8 years to make up what you lost.

You can look into whether you should put any more money into it. You might also be able to reduce the death benefit so that less comes out for the cost of insurance.

Your posted comments on this and other questions are welcome.
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