Cash-value life insurance has life coverage and an investment account.
Besides the death benefit allocated to your beneficiaries after you pass
away, the policy has a cash value, which is money that grows with
tax-free interest.
The cash value is for your benefit. If you don't utilize it before you pass away, it goes back to the company. Then, your dependents only get the death benefit.
You wouldn’t want such a significant sum to go to waste. Instead, you can use your cash value in different ways.
Increase the Death Benefit
If your cash value is a large sum and you don't need the money, why not use a paid-up addition. The purchase increases the death benefit, leaving a more substantial amount for your beneficiaries. That way, you won't lose the cash value you've built up.
Not all insurance companies offer this option. Be sure to check with your insurer before you proceed.
Take a Loan
You might have high-interest loans, poor credit, high-interest advances, or payday loans. In that case, borrowing against your life policy is the best option - you cash in life insurance at a low annual interest rate.
You're not obligated to pay the money back within a specific timeframe because you're borrowing your money. You also don't have any underwriting requirements, and the loan history doesn't appear on your credit report.
However, the loan accumulates interest. The value of the borrowed amount will also be deducted from the death benefit if you pass away before paying the outstanding.
Surrender Your Life Insurance
You can surrender your policy to the insurer for the accrued net cash value. The net value is lower than the total cash value. Plus, you give up your death benefit in the process.
Your insurance company will also charge surrender fees, which further reduces the cash value. Additionally, you'll pay income tax on the amount received.
Sell Your Policy
You could sell your life insurance if your beneficiaries are financially secure or the premiums have become too expensive.
When selling life insurance policy for cash, the company pays you an amount that’s higher than the cash value but lower than the death benefit. Before the sales, it’s advisable to go through an independent consulting service like Your Life Insurance Solution so that you can receive the highest payout possible.
Conclusion
You can only use the cash value of your life insurance before you pass away. As it accumulates, consult an insurance professional like Michael Brohawn and have a concrete plan of how you’ll put it to good use while you’re alive. If you don’t use your cash value before you die, it ends up with your insurer.
The cash value is for your benefit. If you don't utilize it before you pass away, it goes back to the company. Then, your dependents only get the death benefit.
You wouldn’t want such a significant sum to go to waste. Instead, you can use your cash value in different ways.
Increase the Death Benefit
If your cash value is a large sum and you don't need the money, why not use a paid-up addition. The purchase increases the death benefit, leaving a more substantial amount for your beneficiaries. That way, you won't lose the cash value you've built up.
Not all insurance companies offer this option. Be sure to check with your insurer before you proceed.
Take a Loan
You might have high-interest loans, poor credit, high-interest advances, or payday loans. In that case, borrowing against your life policy is the best option - you cash in life insurance at a low annual interest rate.
You're not obligated to pay the money back within a specific timeframe because you're borrowing your money. You also don't have any underwriting requirements, and the loan history doesn't appear on your credit report.
However, the loan accumulates interest. The value of the borrowed amount will also be deducted from the death benefit if you pass away before paying the outstanding.
Surrender Your Life Insurance
You can surrender your policy to the insurer for the accrued net cash value. The net value is lower than the total cash value. Plus, you give up your death benefit in the process.
Your insurance company will also charge surrender fees, which further reduces the cash value. Additionally, you'll pay income tax on the amount received.
Sell Your Policy
You could sell your life insurance if your beneficiaries are financially secure or the premiums have become too expensive.
When selling life insurance policy for cash, the company pays you an amount that’s higher than the cash value but lower than the death benefit. Before the sales, it’s advisable to go through an independent consulting service like Your Life Insurance Solution so that you can receive the highest payout possible.
Conclusion
You can only use the cash value of your life insurance before you pass away. As it accumulates, consult an insurance professional like Michael Brohawn and have a concrete plan of how you’ll put it to good use while you’re alive. If you don’t use your cash value before you die, it ends up with your insurer.
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