The Background\r\nRodolfo was in his late 30s, engaged to be married and was on a quest to buy his first home in New England. He approached his financial advisor about how to finance a home, and in reviewing all his available assets to determine how much he could afford, they uncovered two life insurance policies \u2013 both of which had a cash value.\r\nThe Challenge\r\nA life insurance broker had sold Rodolfo two life insurance policies around a decade before. One was a universal life policy and the other was a whole life policy, two types of policies that accumulate cash, but are very expensive and not efficient from an investment standpoint.\r\n\r\nRodolfo sat down with his financial advisor who walked him through a full insurance needs review, evaluating his income, his assets, what he would be protecting (the reason why he would purchase insurance), and his financial goals \u2013 in this case, buying a home. He didn\u2019t have any children, his fianc\u00e9e was in the workforce with a healthy salary, and there weren\u2019t any other dependents he needed to be concerned about leaving assets to. In short, there wasn\u2019t a great reason why he bought these policies. However, he needed cash for his purchase, and he was still paying into these expensive insurance policies.\r\nThe Solution\r\nRodolfo and his advisor discovered that the universal life policy had accumulated about $30,000 worth of cash value, which, unfortunately, was less than what he had paid into the policy at that point. This did mean, however, that there were no tax consequences for him to surrender the policy (i.e. withdraw the funds). Because he didn\u2019t have insurance needs at the time, wanted cash for a home down payment, and any potential future insurance needs could be met through buying term insurance, Rodolfo surrendered his first policy and used that toward his down payment. His other policy was structured a bit differently and had a longer surrender schedule, which meant he could face penalties by the insurance company as well as small tax liabilities if he surrendered it. His advisor recommended he hold onto that policy through the surrender period, but if he needed the cash, he might be able to access it without too much of a financial hit.\r\nThe Results\r\nThrough the course of a full insurance needs analysis, Rodolfo determined his insurance needs could be met through a much simpler, less expensive policy, and could use the policies he had already purchased to fund some other investment \u2013 in this case a home purchase. Rodolfo ended up successfully purchasing his first home, and he and his now-wife are enjoying homeownership to the fullest. Schedule an appointment with a Personal Capital advisor to help review your situation to ensure all your financial components \u2013 including annuities \u2013 are considered to maximize your total financial benefit.\r\n\r\nThis case study is fictional and does not depict any actual person or event.\r\n\r\nDownload our free Personal Capital Insurance Guide\r\n\r\nPersonal Capital Insurance Series\r\nLife Insurance \u2013 How Much is Enough?\r\nTerm v Permanent Life Insurance\r\nWhole Life v Universal Life Insurance\r\nDo I Have to Buy an Annuity?\r\n\r\nUp Next\r\nDo I Need Property Insurance?