Various Ways Of Cash Flow Banking With Life Insurance

By Brian Reed


Many policyholders sometimes find themselves in situation where they require a lot of money to sort out a few things. If you find yourself in such situations, you can use your policy to get the help you require. Continue reading for a discussion on the most common ways of cash flow banking with life insurance.

You can surrender your life insurance for its cash value. This is the first option that you can consider if you are no longer interested in a policy. Still, you can go this route if you are unable to afford the premiums any longer. However, this is an option that you can go for only when you are unaware of other choices available to you.

Selling your life insurance together with all your death benefits attached to it is another way of meeting your money needs. This option has been used by many people in the last few decades and its popularity has grown a lot. It can work out for you in certain circumstances such as when you are experiencing serious health issues. Additionally, it can work for you if you are elderly.

You can also resolve your immediate financial challenges through withdrawing the value of your cover. This simply entails withdrawing the amount of investment you have made into the policy. The money you get through this method will not be subjected to any taxes or penalties making it attractive. Experts also advise that this approach is way better than seeking a home equity loan or borrowing from 401k.

You can also borrow money against the value of your cover. This you can do through directly approaching your insurer for a loan. This is normally made simple by the fact that the company already has the collateral in their possession. It is therefore a way for getting money in a manner devoid of hassles. In addition, you will not have to go through all sorts of checks and long approval processes.

It is possible to use you death benefits as collateral so as to borrow the money you need. This is definitely a better option to explore than selling your entire policy. Anyone using this approach can get financing from either private lending companies or individuals. However, it is critical to note that you can rarely go this route unless you above 80 years old.

Requesting for your dividends in cash is also another way that you could use to meet your monetary needs. Typically, dividends are usually used to add up on your benefits. However, where you are experiencing certain financial challenges, you can be allowed to withdraw them. One major advantage of using this approach is that the amount you receive is normally exempted from tax.

From the many options already provided above, deciding on the right one to go for may be challenging. However, working with an experienced financial advisor can surely help you make the right choice. Before selecting you financial advisor, there are a number of issues to check. For example, you should ascertain that they are qualified, experience and reliable.




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