How do I cancel or surrender a life insurance policy in Nevada?

Canceling a life insurance policy depends on the policy type. Term life policies can be canceled by simply stopping premium payments—the policy will lapse after the grace period (typically 31 days in Nevada). You can also formally request cancellation in writing if desired, terminating future premium obligations.

Surrendering a permanent life insurance policy (whole life, universal life, IUL) involves more steps. Contact your carrier or agent to request surrender. You'll complete surrender paperwork and receive the cash surrender value—the accumulated cash value less any surrender charges (which typically decrease and disappear after 10-15 years).

Important tax consideration: if the cash surrender value exceeds your cost basis (total premiums paid), the excess is taxable as ordinary income in the year of surrender. If you have outstanding policy loans, the loan balance is added to the taxable gain calculation. Consult a tax professional before surrendering a policy with significant gains.

Alternatives to surrender worth considering: taking a policy loan against the cash value (tax-free and doesn't require policy termination), exchanging the policy for a different permanent policy via 1035 exchange (tax-free), or converting to extended paid-up coverage requiring no further premiums. Agents in our network can review your options before you commit to surrender.