Sentences with phrase «premiums against the cash value»

In whole life, you have to pay your premiums on time every month or year, and you can't miss or your policy will «borrow» the premiums against the cash value, which you pay INTEREST on.

Not exact matches

As you pay your premiums, over time you begin to accumulate a cash - value component you can borrow against.

Money loaned to the policyholder through an automatic premium loan is treated like any other loan against the policy's cash value.

Weigh the annual out - of - pocket cost to you (premiums + deductible) against the current cash value to see if it makes sense.

A policy's cash value is essentially the amount of money you would receive if you surrendered the policy to the insurer, and this amount can be borrowed against or used to pay premiums.

While your monthly premium usually won't change with whole life, you can generally borrow against the cash value of your policy with favorable terms.

Permanent coverage has the potential to build cash value, which means that, generally, the premiums you pay (1) grow with interest; (2) can, in some cases, be borrowed against; and (3) on indexed and variable policies, can be placed within investment accounts.

While the premiums can be fairly pricey, the protection lasts your entire life and the policy will accumulate cash value that can be borrowed against.

Sometimes that cash value can be borrowed against or used to cover the cost of your premiums.

Loans can be drawn against the accumulated cash value to make premium payments in the short term or supplement retirement income later on.

The other main kind of life insurance is permanent life, which builds up cash value that policy owners can borrow against and eventually use to cover premiums for the rest of their lives.

Because the policy has cash value, the insured can borrow against it, with a portion of each premium payment invested.

The main purpose of the legal reserve is to provide lifetime protection, but because more money is collected in premiums in the early years of a policy than is needed to cover the mortality charge, level - premium policies develop a cash value, which the policyholder can borrow against, or can surrender the policy for its cash value if the policyholder no longer wishes to continue the life insurance policy.

This cash value can be borrowed against for emergency expenses or to cover premiums, but is not part of the death benefit.

Assuming you can prove continued insurability, pay off the overdue premiums plus interest, and cover any outstanding loans against the cash value, some life insurance companies will let you reinstate a policy within a certain time period.

Whole life insurance provides a guaranteed lifetime coverage, fixed premiums and cash value accumulation, that can be withdrawn or borrowed against via life insurance loans.

With this option, the premium will still be paid by the policyholder — automatically — by a loan against the cash value of the policy, as long as there is enough cash value that has been built up by that time inside of the cash value component in order to cover such a loan.

While the premiums can be fairly pricey, the protection lasts your entire life and the policy will accumulate cash value that can be borrowed against.

Cash value grows tax - deferred, and can be used to pay premiums or to borrow against for other financial needs.

Term life insurance can build up cash value to borrow against, but not as much value as a life - long premium paying, whole life insurance policy would.

In spite of any potential disadvantages, particularly if your premium payments lapse or you need to borrow against the cash value of your account, several features may work in your favor.

Whole Life — Lifetime protection (as long as premiums are paid) that also builds cash value, which you may be able to borrow against and pay back the loan with interest.

Missed premiums are deducted as loans against the cash value and often charge an interest rate upon repayment.

Premiums are fixed for the life of the policy, and there is a cash account that accumulates cash value and can be used to pay premiums for a period of time or borrowed Premiums are fixed for the life of the policy, and there is a cash account that accumulates cash value and can be used to pay premiums for a period of time or borrowed premiums for a period of time or borrowed against.

If a policyholder has selected the automatic premium loan provision, a loan would automatically be taken against the cash value of the policy to pay the premium in the event the policy was about to lapse for nonpayment of premium.

For example, a policy owner could turn in the policy for its available cash value, or borrow against the cash value and still keep the policy in force, or temporarily use the cash value to pay the policy's monthly premiums.

As long as the premiums are paid, you can borrow * against the available cash value of the policy.

* You won't be able to get loans against term life policies * No cash value would be generated * If you'd need to renew this policy at the end of the term the premium may not remain the same and might well be beyond your reach.

Interest incurred on indebtedness has historically been deductible, (although the deduction of «personal» interest was largely eliminated in 1986), and in the 1950s a type of «leveraged insurance» transaction began being marketed that permitted an insurance owner to in effect deduct the cost of paying for insurance by (1) paying large premiums to create cash values, (2) «borrowing» against the cash value to in effect strip out the large premiums, and (3) paying deductible «interest» back to the insurer, which was in turn credited to the policy's cash value as tax - deferred earnings on the policy that could fund the insurer's legitimate charges against policy value for cost of insurance, etc..

Should you encounter any financial difficulties while your child is growing up, it's good to know that you can borrow against the policy's available cash value as long as all premiums are paid (policy loan interest rate is 8 %).

If you've never previously missed a premium payment or taken a loan against the cash value, you should ask for an illustration showing how it will affect your policy if you do so.

A policy's cash value is essentially the amount of money you would receive if you surrendered the policy to the insurer, and this amount can be borrowed against or used to pay premiums.

He will be able to pay the same $ 200 monthly premium for his entire life, while potentially taking out loans against the cash value of the policy down the road to cover the cost of future premiums.

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As long as premiums are paid and the policy remains in force, policyholders can access the cash value through a tax - free loan against the policy.

Sometimes that cash value can be borrowed against or used to cover the cost of your premiums.

Whole - life policies have a level premium and accumulate cash value (savings) within the policy that can be borrowed against.

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With other types of policies, variations in dividend payments (which can be used to pay against premium), cash value, and costs of insurance in the case of universal life policies can all create variability with the amount of premium required to keep the policy in force and the ultimate death benefit.

They usually also accumulate cash value which can then be paid out in dividends or applied to your account as a payment against your premium.

Notably, depleting the cash value with a withdrawal may mean the policy will still ultimately need another contribution (i.e., more premiums) to sustain in the long run; nonetheless, if the cash value is in a downward spiral towards lapse anyway, a withdrawal to repay the loan will help extend the life of the policy, given that the crediting rate of the cash value is always lower than the interest rate of the loan compounding against it (which for newer policies might be a 0.5 % to 1 % spread, but on older policies can be a 2 % spread or more).

Some whole life policies are used as investments, because they can accumulate a cash value that can be borrowed against or used to cover the cost of the premiums.

Continuing the prior example, assume that Sheila had accumulated a whopping $ 100,000 policy loan against her $ 105,000 cash value, and consequently just received a notification from the life insurance company that her policy is about to lapse due to the size of the loan (unless she makes not only the ongoing premium payments but also 6 % / year loan interest payments, which she is not interested in doing).

Whole life insurance policies can also benefit retirees since they provide a fixed premium, allow the insured to borrow against the accrued cash value, and provide a guaranteed death benefit to the insured's beneficiary.

The policyholder can borrow against the cash value, pay policy premiums with it later on, pass it on to their heirs, or use it as a non-taxable investment.

In the event your policy lapses, you will be required to pay income taxes against any loan amount that exceeds the sum of the cash value and the amount of premiums that you paid.

Weigh the annual out - of - pocket cost to you (premiums + deductible) against the current cash value to see if it makes sense.

Withdraw Money or Borrow Against It When you pay your premium, a portion of each payment goes toward the death benefit, but a portion also goes to building up the policy's savings component (also known as the «cash value»).

The platinum plus whole life insurance plan offers long - term protection against catastrophic events with features including level death benefit to age 100, long - term protection with level premiums, cash surrender value and policy dividends.

The premiums you pay into whole life accrue over time and build cash value that you can borrow against.