All Life Insurance Tips

how to use cash balance in whole life insurance policy.?

Public Comments

1. You can borrow against the cash value. You'll want to pay it back or the amount borrowed will be deducted from the policy value. You'll want to contact your agent for more details.
2. If you are young enough, and have not had this policy too long, cancel it, and purchase term insurance. The whopping 3% if that, you are getting on this whole life policy, you could get more elsewhere. And by purchasing term, you will save a fortune, and can invest some of the difference between what you are saving by canceling the whole life. If you borrow from this policy, you get to pay the insurance company interest............. on your own money! How unfair is this? Deduct this from that 3% and what have you gained?
3. Why do you want to use it? If you do, you have to pay interest to the insurance company. It's a loan, for all practical purposes. And not a cheap one.
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5. Why would you want to pay the insurance company back interest?? Aren't they supposed to be paying you interest on the money you put in?? My suggestion.....cancel the policy and use the amount of the surrender value that you need. With the rest, I would pay up a good 20 year level term policy. That way, you have insurance for 20 years and you won't owe the insurance company MORE money on the money you've already given them. And, if you have enough money to completely pay up the term policy, you'll have THAT much more money in your pocket every month to invest or pay off debt.
6. There is no way to provide adequate advice based on the information you gave. There are a few good ways to use the cash value that may be suitable for you, but many more ways to abuse it. My personal belief is that if whole life is right for you, you should usually not plan on using the cash value at all. Talk with a few insurance professionals in detail about your situation or find a fee-only financial planner.