How to benefit from your life insurance without really dying.

You may think I’m kidding, but many people really can benefit financially from their life insurance with dying. Here’s three of the most common ways.
1. The first and most common way to get money now from your insurance is to cash in your Whole Life, Variable Life, or Universal Life policy with the insurance company. If you have this type of policy and you choose this route, be prepared to find out that the yield promised when you bought the policy will in all probability not come to fruition. IN addition, unless you have sufficient assets elsewhere to protect your heirs and no longer need the insurance, be sure to contact your agent to get another policy in place. Consider a term policy. They are much cheaper and may allow you to use not only the distribution from the insurance company, but the savings from the reduced ongoing premiums for investments that may well produce higher yields thereby helping with your personal wealth development, financial planning and estate planning.
2. Depending on your policy, you may be able to borrow against the cash value at very favorable rates. If you are considering this option and you are thinking of using the money to payoff debts, you should benefit from the transaction so long as the debts you are paying off are at higher interest rates than the new loan. This of course will save you the interest rate differential. If you are considering using the money for investment, you need to be confident that the yield on the investment you are thinking of purchasing will be higher than the rate of the loan, again allowing you to benefit from the interest rate differential.
3. If you are getting on in age, a certain number of companies are offering older policyholders the chance to sell their policies in what is known as a “Life Settlement”. A number of institutional investors, like JPMorgan, Credit Suisse and Goldman Sachs are buying these policies as a portfolio diversification tool. If you sell you insurance policy, the buyer will get the death benefit when you pass on. The price you can sell for will vary depending on your age, health and the buyer’s estimate on how long before your funeral. If you’re not interested in selling, there is the possibility of borrowing against the policy. This is a new concept and the major player right now in this arena is Legacy Loan in Malvern, PA.
So there you have it, three possibly ways to benefit from your life insurance before you die. Before you make any move of this nature you should make sure that your decision will benefit you and your family sufficiently to make the decision wise. Talk to your financial adviser(s) to get input before making your final decision. Its always good to get the best insight you can prior to proceeding on any significant financial path.
Most people have no idea how much life insurance they need or why. They just bought what the agent sold to them or some arbitrary amount that sounded good. Those are both really lousy reasons to buy insurance. If you’d like to learn how much life insurance you really need and why, use our free financial calculator “How much Insurance do I need?” You might be surprised to find that you may well be either over insured, or under insured. The calculator is free, why not find out for yourself?
Here’s wishing you prosperity, security and happiness. Good luck.