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What is the Cash Value of Your Life Insurance Policy?
By A Smith
What is the Cash Value of Your Life Insurance Policy?
One advantage of whole life insurance, which is not available with term life insurance, is Cash Value. Cash value is a little bit like a
savings account. When your premium payments are more than the cost of the insurance, the excess goes into a cash value account, which incidentally also draws interest.
Having cash value can offer you some great options:
- You can cancel the policy and receive the cash value as a lump sum (also know as the Surrender Cash Value).
- If you need to stop paying premiums, you can use the cash value to continue your current policy for a specific period of
time.
- You can withdraw part of the cash value in the form of a policy loan.
The actual cash value amount depends on many factors, including:
- The policy's face amount
- How long you've owned the policy
- Length of the premium payment period
- Whether you have any outstanding policy loans
If your life insurance is a permanent life insurance, your policy should have a table of cash values. If it doesn't, contact your
agent immediately and ask about it.
What does Age Nearest Mean?
One determining factor of how much your life insurance premiums cost is your age. The younger you are when you purchase your life insurance, most likely the less expensive it will be.
When you get a life insurance quote, the rate you are given is based on the age you are closest to. Your next birthday may be 6 months away but in the eyes of most life insurers you've already hit that next magical number. It's a term called "Age Nearest," and that half-year price increase could really add up.
For that reason, you should purchase your life insurance as soon as possible. In the case of life insurance, time really is money.
About the Author
A.Smith has been writing articles in the field of Life Insurance for over 5 years now. Having been in the space for this long, A.Smith really has an understanding of this field. He involves himself in several online communities and provides great support in the field.
Article Source: http://www.simplysearch4it.com/article/27933.html
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