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How do you get cash from a life insurance policy?
What does cashing out on your life insurance mean and how can I go about doing so? Money has been really tight this past year and I am looking for a loan. I have a life insurance policy and I heard that you can sometimes cash it out.
Shannon Martin · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“There are two types of life insurance policies: term life and whole life.
Only whole life insurance policies will have the option to borrow funds.
With a whole life policy, part of your annual premium gets set aside in a separate account. Over time, that account will grow. If needed, you will have the option to access that cash or use the cash as collateral to borrow money from the life insurance company.
The benefit of borrowing from your life insurance policy is lower interest rates and the ability to choose your own repayment schedule.
The first step to get started is to get in touch with your current life insurance company. They will be able to walk you through the process.
While
Jerry
is not a life insurance company, we can help you find ways to save money on your home and auto policies. Try using our free app to find the lowest rates in under a minute.” View full answer
- Gregory R.
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