Question by : Will I get the money from my life insurance back?
I have had life insurance for a year now, which gives me a discount on my car insurance. When I am 21, my car insurance rates may go down and I may not need the life insurance discount from State Farm any more. Will I get the money that I have put into the life insurance back?
Best answer:
Answer by jlf
What type of life insurance policy is it? If it’s term life, that doesn’t have any cash value. But beyond that, why are you paying for life insurance if you don’t need it?
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Life insurance is not a savings account – it’s a bet, on whether or not you’re going to die, while the policy is active. The money you pay in, goes to pay out OTHER claims, from people who DO die while THEIR life insurance is active.
You will definitely not get back all of it.
If it is “term” life, you will definitely not get back any of it.
If it is “whole” life, you might or might not get back some of it.
No. But, if you die before you cancel it your beneficiary would get many times over what you paid. Like car insurance, if you don’t wreck (or die) then you don’t get your money back. The exception is a return of premium policy, but they don’t make one that you’d have for only one year. You’d have to hold it much longer.
Since you get a discount on your auto insurance (called multi-line discount), you would probly be paying the same with or without the life insurance. Or you paying very little for the life insurance because of the multi-line discount. So, there is no harm done in keeping the life insurance.
You may want to relook at things when your life changes, marriage, kids, ect.
If your policy is a term policy there is no money back. They also offer a term policy with a return of premium. You might ask to switch the policy to that kind of policy or ask for a quote for it.