If you are in Florida, getting a life insurance policy may seem to be a difficult endeavor at first, especially if you are not familiar with the several types of insurance policies available. But with the help of research and understanding your financial capabilities and future needs, you might be able to decide which policy works best for you, and one option is getting the cash value life insurance.
So what is cash value life insurance? This is the type of life insurance where the policy accumulates a cash value over a certain period of time. Should the policy holder experience financial constraints, he or she can use this cash value earned as payment for the premium of the policy itself, take it out as a loan or make a full or partial withdrawal of the said cash value amount.
Types of Cash Value Life Insurance
Take note however, that only permanent life insurance policy, such as whole life insurance, universal life insurance, and variable universal life insurance earn corresponding cash value. Term life insurance does not include cash value (Term life insurance covers only a selected period of time unlike permanent life insurance that covers the entire life of the policy holder.), and thus, the premium is much cheaper when compared to permanent life insurance.
Making use of cash value life insurance has its consequences however. If you take the cash value out as a loan, the amount that you have loaned including the interest will be deducted from your death benefit, which means that your beneficiaries will get less than what they should otherwise be getting. Withdrawal of the cash value also greatly reduces the benefit that your loved ones will get (On a positive note, cash value is tax-free and there is no obligation to pay the loaned amount.). So make sure that you think twice before using the cash value and only use it as a last resort, most likely during dire situations like financial problems where you can no longer pay the premium for your policy.
The final question that you should be asking yourself is: is it worth my money in investing in a cash value life insurance, or not? This is where you will have to calculate the risks and gains that you will get in choosing a certain insurance policy, and ultimately, get a life insurance that is worth your money and covers you and the needs of your beneficiaries.
Whichever policy is best for you, RTC Insurance Advisors delivers what’s in your best interest. Request a quote today and we’ll put you on the path to financial freedom. Our direct office number is 352-200-2066. For a free on-line Florida term life insurance quote, get started here…