What Is an Ameritas Universal Life Policy?
Ameritas offers a flexible universal life policy that combines death benefit protection with a cash value component. The policy's cash value grows tax‑deferred, and you can adjust premiums and death benefit amounts within limits set by the insurer.
- What Is an Ameritas Universal Life Policy?
- Why Consider Surrendering?
- Step‑by‑Step: Surrendering Your Ameritas Universal Life Policy
- 1. Review Your Policy Statement
- 2. Calculate the Cash Value
- 3. Determine Surrender Charges
- 4. Complete a Surrender Request Form
- 5. Submit the Form
- 6. Receive Your Cash‑Out Check
- Fees and Charges to Expect
- Tax Implications
- Alternatives to Surrender
- Key Takeaways
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Why Consider Surrendering?
People surrender a universal life policy for reasons such as needing immediate liquidity, switching to a different insurance product, or closing the account after retirement. Surrendering means you receive the policy's cash value, less any surrender charges.
Step‑by‑Step: Surrendering Your Ameritas Universal Life Policy
1. Review Your Policy Statement
Locate the most recent policy statement or log into your Ameritas account. Note the cash value, outstanding loans, and any accrued surrender charge schedule.
2. Calculate the Cash Value
Cash value = Net Cash Value – Outstanding Loan Balance. Ameritas typically provides a "Cash Value & Surrender" worksheet.
3. Determine Surrender Charges
Ameritas applies a surrender charge that decreases over time. The charge is usually a percentage of the cash value and is deducted before you receive the payout.
4. Complete a Surrender Request Form
Obtain the "Policy Surrender Request" form from Ameritas's website or customer service. Fill in the requested details and sign.
5. Submit the Form
Mail or fax the completed form to the address listed on the back of the form. Ameritas will process the surrender, usually within 7–10 business days.
6. Receive Your Cash‑Out Check
The insurer will mail a check for the net cash value after all deductions. Keep the statement for tax records.
Fees and Charges to Expect
Below is a typical fee structure for surrendering an Ameritas universal life policy:
| Attribute | Verified Detail | Source Type |
|---|---|---|
| Surrender Charge | 12% of cash value in the first 5 years, decreasing to 0% after 10 years | Ameritas policy handbook |
| Loan Interest | Current rate ~ 5% per annum, accrues on outstanding loans | Ameritas interest schedule |
| Administrative Fee | $50 flat fee per surrender | Ameritas customer service |
Tax Implications
Cash value withdrawals up to the total amount of premiums paid are generally tax‑free. Amounts exceeding your total premiums are treated as taxable income. Additionally, if you surrender a policy that has a loan, the loan balance is considered a taxable event.
Alternatives to Surrender
- Loan Against Cash Value: Borrow against the policy's cash value at a lower interest rate.
- Partial Surrender: Take a partial payout while keeping the policy active.
- Policy Conversion: Convert to a different product, such as a term or whole life policy.
Key Takeaways
• Surrendering a universal life policy gives you immediate cash but reduces your death benefit permanently.
• Fees can be significant, especially early in the policy's life.
• Tax consequences depend on the amount withdrawn versus premiums paid.
• Consider alternatives like loans or partial surrenders before deciding to cash out.