Should I Surrender my Canada Life Assurance Policies?

[MichaelMurphy70]

A relation has 2 "Whole of Life Plans" with Sun Life Financial of Canada that he took out about 40 years ago and still pays about 90 euros into every month.

They have a surrender value of about 100k and what the documentation says is "Guaranteed Minimum Death Benefit" of about 120k

He has now finally retired and is approaching 80 though in ok health and is wondering if it makes sense to keep paying into these Plans, or cash them in and put the money somewhere better, or else keep them.

Is there a good guide to this type of financial instrument and what would be the general guidance for someone in this situation?

Thank you in advance for any thoughts and advice.

 

[Dr Strangelove]

Does he have any dependents?

 

[MichaelMurphy70]

Yes he has dependents, and a wife who is alive and also in good health. He isn't got much pension funds however.

 

[GSheehy]

It's highly likely that, in the event of death, that it's just one payout - the €120K

I'd ask the company what the €20,000 life cover is costing at this stage because they're only charging for the difference between value and death benefit. My guess is that it's greater than the €90 premium. You could also ask for the life cover to be removed.

I assume the €100K is in a managed fund? There's no exit tax on this and whatever tax is being paid by the provider is/was paid at a rate of 20%.

Take the life cover element off it. Stop paying in. Leave it in the fund or start enjoying it. Maybe make partial withdrawals.


Gerard

www.bond.ie