Life insurance provides a safety net during rough times. In the event of your untimely passing, life insurance steps in to help keep your loved ones afloat. The policy helps cover your family’s financial needs, such as finalizing your affairs or covering daily expenses. While replacing primary income is the key purpose of life insurance cash value, many policyholders may opt to use it to fund their retirement or other endeavors. Here’s a look at some ways to grow the cash value of your life insurance policy.

• Boost the Death Benefit

  If you have accumulated significant cash value over the term of your life insurance policy, you have the option to increase the size of your death benefit to your beneficiaries if you don’t plan to use the cash value yourself. You should notify your insurer that you would like to increase the death benefit in exchange for the life insurance cash value. Once this occurs, it’s recommended that you use the cash value and transfer the amount over to the death benefit.

• Taking Out a Loan

  If your policy has a lot of cash value, you may opt to take out a loan against your policy. Life insurance companies generally offer these loans at lower interest rates than regular bank loans. It’s also worth remembering that you won’t be required to pay back the loans since you’re basically borrowing your own money, but any money you borrow that isn’t paid back will be deducted from your death benefit.

• Paying Premiums

  Once your policy has grown enough life insurance cash value, you can use it to cover your premium payments. Most life insurance companies give you the option to use this strategy. Using your life insurance cash value could help you save thousands of dollars in premiums annually.

• Surrender Your Policy

  You can also surrender your policy and receive the cash value. However, there are some potential complications to consider. When you surrender the policy, you’re also relinquishing the death benefit. There’s also a chance that you will be charged surrender fees, which likely reduces your cash value. Also, remember that any cash you receive when you surrender your policy is subject to taxes.

• Supplement Your Retirement

  Life insurance cash value has become attractive to investors who would like to supplement their income. You can use the funds to enhance your retirement portfolio if you have accumulated a large cash value amount. These funds grow over time at a tax-deferred rate, which could provide special benefits ten years later.

Consult With Steve Wilk Insurance Agency Inc.

Many policyholders fail to maximize the cash value of their life insurance policies. This is a mistake. These strategies provide meaningful options for using the cash value in your policy for present and future benefits. If you have any questions related to maximizing the cash value benefit of your insurance policy, contact the team here at Steve Wilk Insurance Agency.