Can You Take Money Out Of A Term Life Insurance Policy?
5527 POINTSview profileMarlin McKelvyPresident, Consumer Directed Benefit Solutions, Memphis, TennesseeNo. Term life insurance is the equivalent of "renting" life insurance and, just like when renting a house, at the end of the contract term you have accrued no ownership interest or monetary value in a term life insurance policy. In order to build up cash value in a policy or to take out loans on a policy you will want to own a permanent life insurance policy of which there are two broad categories; Whole and Universal life insurance policies. There are many variations on these themes but the ability to accumulate cash value is an essential feature of either policy family type.Answered on August 29, 2014flag this answer
21750 POINTSview profileJim WinklerCEO/Owner, Winkler Financial Group, Houston, TexasThat is a great question, and one that I get a lot! The reason that term life insurance policies are as cheap as they are is because they have very few moving parts. They are very simple, and have very few perks. The cost of your policy is low, because all you pay is the cost of insurance, and some fees and profits for the insurer. There is a very likely chance that you will outlive the term, and they owe you nothing when that happens as when the term policy ends it's as if it never existed. There is no cash value, so there is nothing that you can borrow from. These types of policies are very good for covering short term debt obligations, or supplementing your gift to your beneficiaries, but not so good at anything else. You would need to have a whole life policy to have borrowed from. I hope that helps, thanks for asking!Answered on August 29, 2014flag this answer
10968 POINTSview profileTim WilhoitOwner, Your Friend 4 Life, Brentwood TNUnfortunately, there is no money to take out of a term life insurance policy. Only cash value plans such as whole life or universal life have cash funds that accumulate over time and build an internal cash value. Term life insurance is straight death benefit and typically much more affordable than it's cash value counterparts.Answered on August 29, 2014flag this answer
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