Cash in old Life Insurance policy early?

phoenixphil

Hi there,

Just looking for some clear advice and info regarding an old Life Insurance policy I'm still paying for.

I took out life insurance with Barclays (now through ReAssure) back around 1996 when I left college and started working and have been paying for it ever since. The payments used to be around a tenner a month so I thought that it didn't hurt to keep this policy as a back up. The payments have steadily risen over the past few years and have now received a letter stating they will rising again in around 5 years time to 47 pounds a month.

My concern with this is that the pay-out amount is still set at a rather low 47,000 should I die. This seemed a lot back in the day but now as a father of two and the co-mortgager of a flat its clear my family would need more than that should I get hit by a bus or something.

Ive scouted out plenty of other insurance companies who can give me a lot more for just over my current 20 a month payments so I intend to look into setting up a policy with one of them. My main question revolves around my old Reassure policy. It states on their recent letter an estimated amount I might be able to receive if I cash my policy in early (just over 4 grand). This money would really come in handy as our boilers on the way out and theres some other bits and bobs that need doing around the flat. So would it be as simple as setting up a new policy elsewhere, then calling ReAssure to cash in my policy and get £4 grand back?

I can't see much about online about taking this approach so thought Id ask here to see if my plan makes sense.

Many thanks in advance,

Phil