I just converted my term life policy to a whole life policy with a $14,000 cash value, can I borrow agains this money yet?
Total Comments: 20
Posted: Wed Dec 21, 2011 08:38 am Post Subject:
That is a good question. You will probably need to contact the insurance provider and ask them if you can start borrowing the funds or if you need to wait for an elimination period.
However, I would think that as long as your premiums are up to date and you have a cash value you should be able to borrow from it.
Let us know the outcome if you find an answer.
Thanks and good questions!
Posted: Tue Jan 03, 2012 02:09 am Post Subject:
I just converted my term life policy to a whole life policy with a $14,000 cash value, can I borrow agains this money yet?
Begs the question: If you converted term to whole life, where do you think the $14,000 in cash value came from unless you paid an additional $14,000 in premiums?
Even then, the answer would be, "You can't borrow the entire cash value."
Did you really mean you converted your term life policy into a whole life policy with a $14,000 FACE AMOUNT?
As for Matthew's
an elimination period
that's a term reserved for disability insurance, not life insurance. It has no application to your question.
Cash value policies might not have loanable cash value for three years or more. The contract will tell you.
Posted: Tue Jan 03, 2012 05:05 pm Post Subject:
Even then, the answer would be, "You can't borrow the entire cash value."
Max, why would that be the answer? It may be a true statement, but it answers a question that wasn't asked.
Posted: Tue Jan 03, 2012 09:41 pm Post Subject:
OK, so it technically answers a question that was not asked, but it is certainly the follow on question which, logically, must be "How much can I borrow?" No one without access to the contract can answer that question, so the answer as I stated, was acceptable. Then again, my answer IMPLIES that loans from cash value are possible.
So it is an answer to the OP's question, as was my concluding statement of fact which answers the question: Cash value policies might not have loanable cash value for three years or more. The contract will tell you. A clear indication that a whole life policy will eventually have a loanable value, if premiums are paid.
But you ask, "Why would that be the answer? It may be a true statement . . . ."
If you remove the entire cash value . . . or it is removed by the insurance company as the result of nonpayment of loan principal or unpaid loan interest . . . the policy lapses.
Policy lapse = NO INSURANCE / NO CASH VALUE
Simple.
But the real issue is the OPs original statement: "I converted a term policy to a whole life policy with a cash value of $14,000".
How can this happen? Term = no cash value. Although convertible, it would not be to a policy with actual cash surrender value unless there was a large upfront payment at the time of conversion, which might (remotely) risk "MEC"ing the policy (depends on face amount).
That's why I asked if this was not a misstatement, and that the Whole Life policy has a $14,000 face amount. (The only possibility is a ROP term policy with nonforfeiture value. But I doubt that was the case, otherwise the OP probably would have said so.)
If the face amount is $14,000, it will have very little cash value for many years.
Besides, the OP did not receive any other answer, only statements. Including yours. People post here to obtain answers. If you disagree with an answer, feel free to challenge it by posting one of your own. I offered an answer that was essentially what the OP needed to know. What did anyone else offer?
Posted: Wed Jan 04, 2012 02:39 am Post Subject:
Max, I primarily post to correct your mistakes.
In general, I don't bother answering any questions for a first time poster. This is for 2 reasons.
1)I know that you'll take the time to write a book answering their questions.
2)First time posters rarely bother coming back.
Posted: Wed Jan 04, 2012 02:58 am Post Subject:
And were there any mistakes?
Posted: Thu Jan 05, 2012 02:48 am Post Subject:
And were there any mistakes?
_________________
California-licensed Property & Casualty Broker-Agent and Life & Health Agent. CA Insurance License #0596197. Send me your questions, and I'll send you my answers. I live, breathe, and teach insurance!
Yes, I see two mistakes in this post of yours.
1) If you live, breathe, and teach insurance, you should know more. Your knowledge concerning disability insurance is less than some first year agents. If you live, breathe, and teach insurance, you wouldn't be working as a caterer.
2) You are soliciting insurance business on a public forum in states in which you are not licensed. You can pretend that you are just answering questions, but many states don't see it that way.
Posted: Thu Jan 05, 2012 05:03 am Post Subject:
I am not soliciting insurance.
Posted: Thu Jan 05, 2012 05:03 am Post Subject:
I am not soliciting insurance.
Catering is a spare time occupation. Has been for 20 years.
Posted: Fri Jan 06, 2012 08:19 pm Post Subject:
I am not soliciting insurance.
So what is it that you are doing?
So, can I take out full page ads in the Wall Street journal and USA Today, asking people to contact me to answer their insurance questions without being licensed in every state and without a disclaimer that I am only able to sell in certain states?
Posted: Wed Dec 21, 2011 08:38 am Post Subject:
That is a good question. You will probably need to contact the insurance provider and ask them if you can start borrowing the funds or if you need to wait for an elimination period.
However, I would think that as long as your premiums are up to date and you have a cash value you should be able to borrow from it.
Let us know the outcome if you find an answer.
Thanks and good questions!
Posted: Tue Jan 03, 2012 02:09 am Post Subject:
I just converted my term life policy to a whole life policy with a $14,000 cash value, can I borrow agains this money yet?
Begs the question: If you converted term to whole life, where do you think the $14,000 in cash value came from unless you paid an additional $14,000 in premiums?
Even then, the answer would be, "You can't borrow the entire cash value."
Did you really mean you converted your term life policy into a whole life policy with a $14,000 FACE AMOUNT?
As for Matthew's
an elimination period
that's a term reserved for disability insurance, not life insurance. It has no application to your question.Cash value policies might not have loanable cash value for three years or more. The contract will tell you.
Posted: Tue Jan 03, 2012 05:05 pm Post Subject:
Even then, the answer would be, "You can't borrow the entire cash value."
Max, why would that be the answer? It may be a true statement, but it answers a question that wasn't asked.
Posted: Tue Jan 03, 2012 09:41 pm Post Subject:
OK, so it technically answers a question that was not asked, but it is certainly the follow on question which, logically, must be "How much can I borrow?" No one without access to the contract can answer that question, so the answer as I stated, was acceptable. Then again, my answer IMPLIES that loans from cash value are possible.
So it is an answer to the OP's question, as was my concluding statement of fact which answers the question: Cash value policies might not have loanable cash value for three years or more. The contract will tell you. A clear indication that a whole life policy will eventually have a loanable value, if premiums are paid.
But you ask, "Why would that be the answer? It may be a true statement . . . ."
If you remove the entire cash value . . . or it is removed by the insurance company as the result of nonpayment of loan principal or unpaid loan interest . . . the policy lapses.
Policy lapse = NO INSURANCE / NO CASH VALUE
Simple.
But the real issue is the OPs original statement: "I converted a term policy to a whole life policy with a cash value of $14,000".
How can this happen? Term = no cash value. Although convertible, it would not be to a policy with actual cash surrender value unless there was a large upfront payment at the time of conversion, which might (remotely) risk "MEC"ing the policy (depends on face amount).
That's why I asked if this was not a misstatement, and that the Whole Life policy has a $14,000 face amount. (The only possibility is a ROP term policy with nonforfeiture value. But I doubt that was the case, otherwise the OP probably would have said so.)
If the face amount is $14,000, it will have very little cash value for many years.
Besides, the OP did not receive any other answer, only statements. Including yours. People post here to obtain answers. If you disagree with an answer, feel free to challenge it by posting one of your own. I offered an answer that was essentially what the OP needed to know. What did anyone else offer?
Posted: Wed Jan 04, 2012 02:39 am Post Subject:
Max, I primarily post to correct your mistakes.
In general, I don't bother answering any questions for a first time poster. This is for 2 reasons.
1)I know that you'll take the time to write a book answering their questions.
2)First time posters rarely bother coming back.
Posted: Wed Jan 04, 2012 02:58 am Post Subject:
And were there any mistakes?
Posted: Thu Jan 05, 2012 02:48 am Post Subject:
And were there any mistakes?
_________________
California-licensed Property & Casualty Broker-Agent and Life & Health Agent. CA Insurance License #0596197. Send me your questions, and I'll send you my answers. I live, breathe, and teach insurance!
Yes, I see two mistakes in this post of yours.
1) If you live, breathe, and teach insurance, you should know more. Your knowledge concerning disability insurance is less than some first year agents. If you live, breathe, and teach insurance, you wouldn't be working as a caterer.
2) You are soliciting insurance business on a public forum in states in which you are not licensed. You can pretend that you are just answering questions, but many states don't see it that way.
Posted: Thu Jan 05, 2012 05:03 am Post Subject:
I am not soliciting insurance.
Posted: Thu Jan 05, 2012 05:03 am Post Subject:
I am not soliciting insurance.
Catering is a spare time occupation. Has been for 20 years.
Posted: Fri Jan 06, 2012 08:19 pm Post Subject:
I am not soliciting insurance.
So what is it that you are doing?
So, can I take out full page ads in the Wall Street journal and USA Today, asking people to contact me to answer their insurance questions without being licensed in every state and without a disclaimer that I am only able to sell in certain states?
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