Did you know that if you own a life insurance policy, you may be sitting on a bundle of cash? You may be able to get an advance on life insurance that you have owned for years and use that money to provide for your current health care needs or use in some other way to make your life more comfortable. Life insurance is an asset just like your home or your car. It has value. As a smart consumer, you must get your life insurance policy valued before you just throw it away. Seniors literally throw away Billions of dollars a year.. without ever knowing.
Using your Accelerated Death Benefit
If your life insurance policy has an accelerated death benefit you may be eligible to take out a tax-free life insurance loan. The intention of this type of provision in a life insurance policy is to provide a benefit to an individual who has been diagnosed with a terminal illness and has a life expectancy of two years or less. In such an instance, a life insurance policy advance or loan against the death benefit of the policy, can be used to provide money to help the individual while he or she is still alive. Upon the death of the insured, the loan is paid off out of the proceeds of the death benefit and any remaining amount is then paid to the beneficiary of the policy.
Using a Life Insurance Advance
In the secondary market for life insurance, you may also be eligible for another type of advance on life insurance policies that you own. If your policy does not contain an accelerated death benefit rider you may qualify under a life insurance advance. Like an accelerated death benefit loan, you can borrow an amount up to $500,000, based on the amount of your death benefit of your life insurance policy. The life insurance loan is repaid, upon your demise, out of the death benefit and any remaining funds are distributed to the beneficiary.
In many ways, this type of life insurance policy advance is better than the much more restrictive accelerated death benefit loan. You do not have to meet the rigid requirements of having a terminal illness that gives you a life expectancy of two years or less. You also have the freedom to spend the money any way you see fit. Many people need the money for current assisted living expenses and this is an excellent way to meet that need.
Once you know how much the current value of your life insurance policy is, you can make an informed decision on whether or not you should apply for a life insurance loan. Although you may not have many years left, you should do what you can to enjoy the time you have remaining. Why not use the value in your life insurance policy to get the money you need?