Generally, a life insurance policy is intended for your beneficiaries to receive funds after your death to replace your income or to help pay off debts or funeral expenses. But sometimes that beneficiary has to be the policyholder instead. Regardless of the reasoning behind your question; How Do I Cash Out My Prudential Life Insurance Policy? why you decided to cash out your insurance policy, there are a few things you need to know before you proceed.
Who Is Prudential Life Insurance Company?
Prudential was founded in 1875 which makes it over 142 years old. They have been named the best life insurance company by Fortune as well. Prudential is rated A+(Superior) by A.M. Best.
How Does Prudential Life Insurance Work?
Prudential is focused on affordable life insurance rates with solid underwriting for people that could have health issues or be a tobacco user.
Their life insurance process works like this:
The application process is online and electronic, simple and short, once you submit the application you will be sent to underwriting.
For final expense a paper application is needed.
Policy Delivered Via Regular Mail
Once your policy has been approved and issued you will have to wait for your policy in the mail.
The down side to this is the waiting and having to keep up with paper documents.
You might want to upload a copy of it to the cloud like with Google Drive.
Can I Take A Loan From My Account?
Depending on the rules established by your company, you may be able to take a loan from your employer-sponsored plan. Typically, you can take up to 50% of your vested balance, up to a maximum of $50,000. Your highest outstanding loan balance may not exceed $50,000 in a rolling 12-month period.
For more information on taking a loan, log in Opens in a new window to your account to view your plan’s rules and how much you may be eligible to take as a loan.
Am I Eligible To Take A Withdrawal From My Account?
Yes. You will generally be eligible for a Termination Withdrawal once you are separated from the employer sponsoring the plan, regardless of age. Typically, it can take the employer up to 4-6 weeks to notify Prudential of your separation. Your plan may also have a required waiting period which must be observed after separation. Your plan may have more specific criteria, including limits on the number of distributions allowed during each year. Please log in to your account for more information.
For many 401(k) plans, you become eligible for an In-Service Withdrawal at age 59½. For 457(b) plans, you are typically eligible for an In-Service Withdrawal at age 70½. Please note, not all plans allow for withdrawals prior to separation from service, and there may be additional restrictions based on your specific plan’s rules. Please log in to your account for more information.
Important: Prudential Life Insurance strongly encourage you to avoid accessing your retirement savings if possible. If you do need to take a withdrawal, please keep in mind that it cannot be paid back. In addition, there may be tax implications and penalties associated with early withdrawals.
How Do I Cash Out My Prudential Life Insurance Policy?
To request a loan or withdrawal from your Prudential policy, or to perform a cash surrender of your policy, contact your Prudential professional, or call their Customer Service Center at 1-800-778-2255, Mon. -Fri., 8 a.m.-8 p.m. ET. Please have your policy numbers available when you call.
What Is The Status Of My Withdrawal/Loan?
You can check the status of your withdrawal/loan request at any time by logging in Opens in a new window to your retirement account. Go to your plan on the My Accounts page and select Transaction History from the Quick Actions menu to view recent account transactions.
I Need Money From My Retirement Account Now. What Options Do I Have?
Depending on your plan’s rules, there may be a number of ways you can take money out of your retirement plan(s).
- Withdrawals – Generally, if you take a withdrawal, your money will be permanently removed from your account, and you will have to pay taxes and possibly an early-withdrawal penalty.
- Loans – If you take out a loan from your account, it must be repaid in a specific time period. If you’re unable to repay your loan, you’ll be taxed on the outstanding balance. Interest on the loan will not be tax deductible, and other plan-specific rules may apply.
- Hardship withdrawal – Your plan may allow for hardship withdrawals for certain economic reasons … or, if you live or work in one of the states that has been named by FEMA as a federal disaster area, you may qualify for a hardship withdrawal under federal disaster relief rules.
To learn more about the options available to you, log in Opens in a new window to your account and look for the Loans or Withdrawals options on the My Accounts page. If your plan allows these types of transactions, these pages will provide an overview of your withdrawal options and the amounts currently available to you.
Note: Depending on your plan and marital status, the process may require you to complete forms. Some plans may require spousal consent prior to processing a withdrawal request. Still have questions related to loans and withdrawals? state it in my comment box below. Insurance Diaries will reply as soon as possible.