No Medical Exam
Simple Application
No Medical Exam—Simple Application
Free Quote—Apply in Minutes
No Waiting Period Full Coverage The First Day
Fast Approval Process Full Coverage The First Day—Fast Approval Process
Monthly Rates As Low As: $3.49 for Adults
$2.17 for Children or Grandchildren
Whether you’re struggling financially, want to get a hold of extra cash, or simply don’t need as much coverage as you once did, you may consider cashing out your whole or universal life insurance policy, which are considered permanent policies. This can be a big decision to make, so it’s important to understand the financial impact it can have on your life.
Face Value versus Cash Value
It’s important to understand there are two components to whole life insurance. The first component is the face value, or the amount paid to your beneficiaries when you pass away. The other component is the cash value, which is funded by a portion of the premiums you pay. When you cash out a policy, you won’t receive your full premium contributions, but rather the full cash value of the policy.
Cashing Out Your Life Insurance Policy
When you cash out a permanent life insurance policy, you have the options of selling or surrendering your policy. You can then use the cash value towards paying off debt, emergencies, household repairs, loans, marriage, premium payments, retirement, and more.
The following are different ways you can go about cashing out your whole or universal life insurance policy:
Borrowing from the Cash Value
With most permanent life insurance policies, you have the option to borrow from your policy’s cash value. Most insurers have a minimum cash value requirement you must meet before you’re able to take out a loan. However, after you’ve met that requirement, you can borrow up to the full amount you’ve accumulated.
Choosing to borrow money against your life insurance policy will ultimately impact your coverage, so you should carefully consider your coverage, benefits, and premium schedule prior to borrowing money.
Cash Value Withdrawals
Surrendering Your Policy
Life Insurance Settlements
Alternative to Cashing Out a Policy: Personal Loans
If you’re struggling financially but don’t want to take out cash from your life insurance policy, you may consider applying for a personal loan. These loans are available at banks, credit unions, and from personal lenders. They can quickly get you access to money you need, and typically at reasonable interest rates. If you choose to take out a personal loan, it’s important you consult a financial advisor or accountant beforehand, to determine which option is the best for your specific situation.
