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Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 11821
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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My husband signed over a Variable Appreciable Insurance

Customer Question

my husband signed over a Variable Appreciable Insurance policy to me several years ago. He got his policy in 1990 for $100,000. We have come on some hard times and I was wondering if we could cash it in for whatever it is worth today?
Submitted: 1 year ago.
Category: Finance
Expert:  Lane replied 1 year ago.

Hi,

.

Yes, you can. What you might want to do is have the Prudential rep see how much you can pull without having the policy lapse.

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If the policy lapses, and you have pulled more than your basis (total amount invested - premiums paid) then you will get a 1099-R for tax on the amount over basis that you pulled (or amount avaiable if the policy lapses for some other reason - such as too low a premium payment), and there will be an additonal 10% penalty if the owner is under age 59 and 1/2.

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Now, if the cash value is LESS than what you have paid-in (and that's possible), you can cash it in WITHOUGHT any tax taxation or 10% penalty - the 10% penalty applies if you, the owner, are under age 59 and 1/2.

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Also, DO be aware that VAL's sometimes come with surrender charges, depending on how long you've owned the contract

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Let me know if you have questions .

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Lane

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Expert:  Lane replied 1 year ago.
Hi,
.
I’m just checking back in to see how things are going.
.
Did my answer help?
.
Let me know…
.
Thanks
Lane