Non Smoker – Level Plan
|Age 50||$5,000||$11.23 p/m|
|Age 55||$5,000||$14.01 p/m|
|Age 60||$5,000||$17.82 p/m|
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Withdrawals – Generally you can withdraw a limited amount of cash form your policy cash value. This can be done by simply calling your life insurance company and request the appropriate form to fill out in order to get the withdrawal. Consequences:
- Withdrawals could reduce your cash value and cause a reduction of your death benefit.
- You could be taxed on the withdrawal.
- Your policy cost could increase if your cash value is reduced.
Loans – In most cases You can borrow against your cash value with the accumulated cash used as collateral. Consequences:
- You may have to pay interest on the loan.
- The loan balance will generally reduce your policy death benefit.
- If your loan is unpaid and accruing interest it will reduce your policy cash value.
- A reduction in cash value could possibly increase your premium.
- If insufficient premiums are being paid it could cause your policy to lapse.
Surrender – You could also surrender the policy just by requesting and submitting the required forms. By surrendering the policy you will get the accumulated cash and use it any way you wish. Consequences:
- If you surrender the policy during the early years of ownership you may have to pay surrender fees.
- You may have to pay taxes on the surrender value.
- The gain on the policy may also be subject to income tax.
- You relinquishing your beneficiary’s right to the death benefit.
- A new policy may cost you more.
Life Settlement – As the owner of the policy you can sell your life insurance policy to an individual or a life-settlement company in exchange for cash. Consequences:
- You give up control of your policy along with the death benefit
- It is hard to determine a market price on your policy so you may not get a fair price on your policy.
- You could have a tax liability from the proceeds and pay high commission cost.
- The new owner will have access to your medical records.
Before you decide to cash in on your policy, it is always best to examine all the consequences. Then decide the best way forward based on your situation.