Dumping a policy can be costly. Here are some things to consider before you take that step:
The older you are, the costlier the new coverage. In some cases, you might be denied.
If you have severe health problems, you might be denied new coverage altogether.
Cashing in the policy or annuity may trigger penalties.
If your policy has accrued cash value, you will have to pay taxes if you withdraw it. In addition, you may be hit with a 10% IRS penalty.
With annuities, take advantage of the option that permits annual withdrawals of 10% to 15% without paying a surrender charge.