Permanent Life Insurance policies provide a death benefit to protect your loved ones in the event of your death. But another important feature is the ability to build and use cash value on a tax-preferred basis. When you pay premiums for a permanent life insurance policy, a portion pays for the death benefit coverage and the rest is contributed to your cash value. These and any additional contributions you make to your policy's cash value can grow freely without being impacted by taxes.
Once your cash value has had sufficient time to grow, and you're ready to use the money from your policy's cash value, you can withdraw up to the amount of contributions you've paid generally without paying taxes. If you withdraw all of your contributions, you can use the gain of the policy as collateral to borrow money from the life insurance policy.
Loans from life insurance policies offer several advantages. Since an obligation to repay the loan remains, a loan does not cause taxation. Typically loan rates are low. Taking loans is an easy process, and you're free to use the money whenever and however you wish. As cash for unexpected expenses, to help pay for those once in a lifetime opportunities, or as a source of supplemental retirement income college funding and other financial needs.
If you choose not to withdraw your contributions or take loans, your policy's cash value gives you the potential to maintain your death benefit without paying additional premiums, or increase your death benefit without underwriting.
The more you know about the cash value feature of permanent life insurance, the better you can take advantage of its many benefits, and the happier you'll be with the decisions you make. Your financial professional can help you determine the type of policy that may be right for you. Contact your advisor to get started today.
By: Securian Life Insurance
Once your cash value has had sufficient time to grow, and you're ready to use the money from your policy's cash value, you can withdraw up to the amount of contributions you've paid generally without paying taxes. If you withdraw all of your contributions, you can use the gain of the policy as collateral to borrow money from the life insurance policy.
Loans from life insurance policies offer several advantages. Since an obligation to repay the loan remains, a loan does not cause taxation. Typically loan rates are low. Taking loans is an easy process, and you're free to use the money whenever and however you wish. As cash for unexpected expenses, to help pay for those once in a lifetime opportunities, or as a source of supplemental retirement income college funding and other financial needs.
If you choose not to withdraw your contributions or take loans, your policy's cash value gives you the potential to maintain your death benefit without paying additional premiums, or increase your death benefit without underwriting.
The more you know about the cash value feature of permanent life insurance, the better you can take advantage of its many benefits, and the happier you'll be with the decisions you make. Your financial professional can help you determine the type of policy that may be right for you. Contact your advisor to get started today.
By: Securian Life Insurance
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