15 Feb Surrender your life insurance policy for its net cash value
If you want to give up your coverage and cash out your life insurance policy, you should first try to sell it in a life insurance cash settlement. You might want to do this if your premiums are high and you no longer have dependents, or they're all financially secure. In a life insurance cash settlement, a company buys your life insurance policy for an amount that's greater than the cash value but less than the death benefit. Some companies even buy term life insurance policies for cash, but only if you're quite old or sick, so likely to pass away during the policy term.
You'll have to pay income and capital gains taxes on the settlement. Be aware that any brokers that help pair you up with a settlement company will typically take a cut. But the net effect is that you will usually get more money than you would by surrendering your policy.
Once the policy is sold, the life insurance settlement company takes over premium payments and becomes the policy beneficiary. The downside is, you won't always find a buyer and the process of being evaluated by a life insurance settlement company can take several weeks.