Can I cash in a life insurance policy?
With inflation on the rise, consumers are looking at ways to cut costs and buffer their savings. Some are turning to their life insurance policies to provide extra cash. It is important to consider the type of life insurance policy you own, your age and health, and more before making any decisions regarding your life insurance policy.
Term life insurance policies are not designed to accumulate cash value. You will not be able to take any loans from a term policy. You will also typically not get any money back if you cancel a term policy. If you are looking to cut your expenses, you should meet with a trusted advisor before terminating your term life insurance policy.
Whole life and universal life insurance policies do accumulate cash value over time. Universal life policies are designed to overfund so that you can borrow from them in retirement for tax free income. However, if you are purchasing a life insurance policy specifically for the death benefit, then it is generally not advised to borrow from the death benefit. Withdrawing or taking a loan from your life insurance policy, may give you a boost in the short term, but it might hurt your family as they are left to take care of final expenses. We recommend that you meet with a trusted advisor before taking a loan or cashing in your life insurance policy so that you have knowledge on the pros and cons before making the decision.
Recessions are scary and living paycheck to paycheck with all of the uncertainty life brings doesn’t help. Life insurance might be one of your bigger assets when a recession hits. Don’t risk it all without first looking at other ways you can help your finances.
If you find yourself questioning your life insurance, then please give us a call. We’d be happy to walk through the cost vs. benefit with you and help you plan a future course. 270-444-7291
Insurance products are offered through the insurance business Bradshaw and Weil Insurance and Financial Planning. Bradshaw and Weil Insurance and Financial Planning is also an Investment Advisory practice that offers products and services through AE Wealth Management, LLC (AEWM), a Registered Investment Adviser. AEWM does not offer insurance products. The insurance products offered by Bradshaw and Weil Insurance and Financial Planning. are not subject to Investment Advisor requirements. AEWM and Bradshaw and Weil Insurance and Financial Planning. are not affiliated companies. 1468674 – 9/22
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