by Guest » Wed Aug 24, 2011 05:33 pm
Can someone help me .....
My dad is 90. He has a whole life policy (comes up as an ordinary life insurance policy). He has a few significant bills to pay off...should we take a loan against this policy or cash it out.
On this policy it says:
Basic policy 10,000
fully paid additional insurance 16,050
settlement dividend 350
total insurance coverage 26,400
cash value:
basic policy 8,346
fully paid additional insurance 14,825
settlement dividend 350
total cash value 23,611
it states he can take a loan of 23,000 out at 5%. We pay 75.63 quarterly.
Can someone give me advice on this....Thanks so much.
My dad is 90. He has a whole life policy (comes up as an ordinary life insurance policy). He has a few significant bills to pay off...should we take a loan against this policy or cash it out.
On this policy it says:
Basic policy 10,000
fully paid additional insurance 16,050
settlement dividend 350
total insurance coverage 26,400
cash value:
basic policy 8,346
fully paid additional insurance 14,825
settlement dividend 350
total cash value 23,611
it states he can take a loan of 23,000 out at 5%. We pay 75.63 quarterly.
Can someone give me advice on this....Thanks so much.
Posted: Thu Aug 25, 2011 09:29 am Post Subject:
It all depends whether you want to get death benefits on the event of your Dad’s death, or not.
You may surrender the policy but you’ll get only the current cash value after the deduction of surrender charges that may apply and any missed premiums in the past. And there won’t be any benefit also on the event of death of the insured.
Whereas, if you take a loan of only the required amount and continue with the policy, amount of your loan and loan interest will be deducted from the death benefit. So, the death benefit is just getting reduced.
Posted: Sun Sep 04, 2011 11:06 pm Post Subject: Whole Life-Ordinary Life
If your concerned about the bills there are some considerations. Who is the beneficiary? If he is single his debts will go with him when he goes to his reward. Currently are there enough funds for burial in the future? Looking at the loan feature if you took the full loan amount you would need to set aside some fund for the burial for example $10,000 and that would leave you with $13,000 to do whatever he wishes. Pay bills and whatever. Cash out or loan ask about any potential tax implications..
Posted: Sun Sep 04, 2011 11:50 pm Post Subject:
If I went this route, I would not take full loan value. I certainly wouldn't cash the policy in, unless there were adequate funds for burial. At least 10,000.00! If it was me, I would visit with my agent or the insurance company, and let them know you wanted to take a loan, but leave at least 10,000 for burial. They will tell you if this is possible according to the terms of the policy. My advice if you do this, don't miss a payment. You want the coverage there for the funeral if you don't have the money already in savings. I hope this helps answer your question.
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