Having a cash value life insurance policy is a key piece to a secure future, and with the added benefit of being able to take a tax-free loan out against it, why wouldn’t you? The uses of a cash value life insurance policy, also known as a universal life insurance policy, are endless and many people use them to plan well into their future.
Making smart financial moves now will make your future simpler and more secure. Cash value life insurance ensures that at some point down the road you have a nice chunk of savings accumulated that you can tap into for anything you may need. You can convert it into an added death benefit, use it to pay your ongoing premiums, or even take the vacation of a lifetime. The important thing is that through your life insurance, you are passively building a savings account that can make all the difference to you and your family in the years to come.
Life insurance is a necessity. You want to protect your children and your spouse from undue financial hardship in the event of your death. You want bills and debts to be paid, and you want your income replaced so your family isn’t struggling financially. The great thing about a cash value policy is that its something you can enjoy with your family. The accumulated value is intended to be withdrawn at some point, during the insured’s life. Of course, you don’t have to take it out, but if you don’t you may inadvertently surrender the funds. If you know you will never use that cash, make provisions with your insurer so that that value isn’t lost.
Withdrawing your accumulated cash value isn’t difficult in most cases. Typically you need to fill out a form or two detailing the amount you want to withdraw, and the method you would like to use (take it as a loan, a straight withdrawal, or surrender the policy) and then submit the paperwork. It is a relatively short turn around time before you see those funds in your bank account, so it really is an easy process.
Some important points to note are:
If you request to withdraw less than what your cash value actually is, you can take this money tax-free. However, if you request to withdraw above and beyond what you have paid into the policy, the amount that exceeds your cash value is taxable. Any value you remove from your policy via a withdrawal, is likewise subtracted from the death benefit (the amount you family receives from the policy in the event of your death).
It is a lot of information to digest, and cash value life insurance policies are known to be some of the most complicated insurance policies available. There is lots to know, lots of questions to ask, and lots of benefits. LSM Insurance is an insurance brokerage that helps people navigate the intricacies of universal and whole life insurance policies, everyday. Even if you don’t know what you need, an insurance broker can help.
Brokers are under no obligation to a specific insurance company, and so they can show you policies and products from all the insurance companies available. The best part is that brokers are paid by the insurance companies, not by you. You walk in the door with questions and walk out the door with the right policy for you and your family – and all your money in your wallet!
Contact LSM today for more information about cash value life insurance policies.