Get Extra Cash From Whole Life Insurance
Many people will need to borrow money for different purposes over the course of their lives
. While most consider walking into a bank to apply for a loan, many are unaware that they may be able to borrow money from a life insurance policy. Whole life insurance policies are designed to accumulate cash value over time and have many benefits, but many people are not aware of this feature.In fact, in a recent survey conducted by the National Association of Insurance Commissioners, over two-thirds of those surveyed did not realize that some types of insurance policies accumulate cash value. Term life policies do not accumulate cash value and coverage will expire at the end of the term. Whole life policies, on the other hand, accumulate cash value, have some tax benefits and allow policyholders to borrow against cash value funds that have accumulated. Further, whole life policies may stay in effect for a policyholder's entire life and may never expire.
Loans taken against whole life insurance policies have some advantages over bank loans. The terms of these insurance policy loans can vary from policy to policy, so it is important to read the fine print on a policy. However, in general, these are low interest loans that are easily obtainable without a stringent or time-consuming approval process. This is because the cash being borrowed belongs to the policyholder rather than to a bank.
For consumers who are interested in getting life insurance quotes in the near future, these benefits of whole life insurance should be considered carefully. Whole life insurance quotes will be higher than term life quotes. However, the benefits of a whole life policy may make these policies more attractive to some than term life policies. Loan funds from a whole life loan may be used for a number of purposes, including to fund a child's college education, for investment purposes, to fund retirement plans and more. While funds can be borrowed, it is possible to simply cash a policy out for cash when coverage is no longer needed.
After consumers take time to gather life insurance quotes for different types of policies and from different life insurance companies, it is wise to carefully review the policy terms before making a buying decision. This is especially true with regards to whole life policies. Whole life policies may have minimum and maximum interest rates in place for cash value growth as well as for loans against cash value. Many have a guaranteed rate of growth, which can be a benefit to those purchasing a whole life policy for cash value accumulation.
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