Life insurance policies can be uniquely flexible in providing your love one's protection. The main benefit of the linsurance is the benefits received upon death. Death benefits that are paid out are intended to assist with expenses associated with passing and living expenses for the surviving members. Permanent life insurance has "living benefits" as well as death benefits. Living benefits are benefits that you may use during the course of your lifetime. If you need extra funds for retirement or if it's time for your child to go off to college, you can borrow against your policy.
Permanent insurance accumulates cash value over time. You can borrow money on the cash value of your permanent insurance policy. Although borrowing money from your life insurance policy is a popular perk, there are consequences. Borrowing money against your life insurance policy will reduce your death benefits, it may also accumulate interest. Interest must be repaid in addition to repaying the borrowed amount. If for any reason the policy loan is not repaid, it will result in a negative affect on your policy.
When a policy loan out lives the policy holder, then the outstanding balance will be deducted from death benefits. That means that the surviving members will not receive all the security you had intended. Before cashing out on policy loan money you should learn about the financial impact it can have on your policy. Weight your options so that you may see if your financial need is worth the reduction of your death benefits.
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