There a number of situations in life where money is the only way to resolve the issue. Many times in your life you may be presented with a situation where you need a lump sum of cash. In the event, that you can not ask a family or friend there is another option. If you have a whole life insurance policy, you can borrow against it.
There are two types of personal term life coverage policies that you may have purchased: term or whole life. Term insurance is only valid for a certain amount of time. Whole life, also known as permanent, is purchased for a lifetime. You can only borrow against a whole life policy as it has a cash value. You pay more in premium per month in order to have this cash value with whole life coverage.
If you want more protection from any form of life-threatening situations, purchase whole life coverage. The value starts to accumulate as you continue to pay premiums in the long run. It may be possible that the cash value growth may be higher than your death benefit.
Before you can borrow against your whole life policy, make sure that your life insurance policy offers a cash value feature. You next want to call your insurance company and find out the amount of the policy. The amount will be based off how long you have had the policy. Once you know the amount, ask about the Interest rates for a life insurance loan. Every insurance company will have a different interest rate depending on the personal term life coverage.
Once you agree to the interest rate, you will have to pay back the amount. This will be on top of your monthly premiums. You can use the money for any expenses you wish. Most people use it to pay down their debts or buy things for their home. In the event that you pass away before the loan is paid in full, the remaining amount will be deducted from your beneficiary’s benefits.
Most whole life insurance policies offer this cash value benefit. If you do not want this option, you would then purchase a term life insurance policy. This policy is less expensive and is only valid for a limited time. it will not cancel them out. To get better understanding of how to borrow, you will need to talk to your life insurance company.
If you have questions regarding personal term life coverage or whole life coverage, let Blue Sky Coverage help you decide which policy will work best. Call us today to get more information.