Can You Get Cash Through Your Life Insurance Policy?
Life insurance policies are designed to financially help your loved ones after your death. However, you can also benefit from your policy while you’re still living. Life insurance policies have value, and you can access that value to get cash in an emergency, buy a home or pay for education. Here are five ways you can realize the benefits of your life insurance policy in your lifetime.
- Take out a loan. You can borrow money against your life insurance using a policy loan. Life insurance policy loans typically have much lower interest rates than those offered by financial institutions. This an excellent option if you need a lump sum of money now but know that you’ll be able to pay it back over time. Actually, you don’t need to pay the loan back. Any money owing, plus interest will be deducted from the death benefit when you die.
- Withdraw the money. Most Canadian life insurance policies allow you to withdraw a part or the full cash value of their policies. However, these withdrawals will directly affect your death benefit. Insurance providers will reduce the death benefit by the amount you withdraw and sometimes more.
- Pay your premiums. Many Canadian life insurance companies allow you to use the cash value of your policy to pay your premiums. This process is called “paying up.” Using the cash value to pay your insurance premiums can save you thousands of dollars annually and doesn’t affect your death benefit.
- Increase the death benefit. If leaving behind money for your loved ones is paramount, then you can use the cash value of your life insurance policy to increase the death benefit. If you’ve owned your policy for a significant time, you can leverage the cash value and transfer that value to the death benefit.
- Surrender your policy. If you no longer need or want the benefits of life insurance, you can surrender your policy completely. Doing so will forfeit any benefits, and your beneficiaries will get nothing when you die. Keep in mind that surrendering your policy may involve fees, and you’ll have to pay taxes on the money you receive.
Life Insurance in Halifax and Throughout Nova Scotia
At Eisenhauer Insurance Inc., our brokers are experienced in every facet of life insurance. We can help you navigate the process if you need cash or want to make a claim. We can also help you find affordable and complete living benefits insurance policies. Contact us today to schedule a no-obligation consultation at one of our locations in Halifax and Dartmouth.