Welcome to Quotacy & # 39 ;s Q&A Friday where we answer your life insurance questions. Quotacy is an online life insurance agency where you can get life insurance on your terms.
I'm Jeanna and I'm Natasha.
Today's question is: Can I take out my lifetime insurance?
The answer is no. And this is because term insurance does not accumulate a cash value that any permanent life insurance does so there is nothing to take out.
So if you survive your insurance, the coverage simply ceases.
Your coverage ends and you celebrate that you are still alive.
However, if you want a life insurance policy and do not mind paying extra for a guarantee, you may want to consider repaying a premium insurance policy. [1
Sure! Returning premium insurance is basically how it sounds. It is a term policy, but if you survive it, you will get your premiums back.
So it's a guarantee because either your beneficiaries get the death benefit or you get back all the money you paid in.
Exactly. However, there is a catch. Returning premium insurance is more expensive than a regular life insurance.
How much more expensive?
Well, for example, a 20 year old $ 500,000 life insurance policy for a healthy 30 year old will drive you about $ 30 a month. The same insurance as reimbursement of premium insurance gives you about $ 100 a month.
That's a big difference.
That's it, but for some people it's worth it. If you are financially stable, you have monthly contributions to pension plans, and you do not mind paying extra for that guarantee, then repayment of premium insurance is a good alternative.
And does not any return on the premium term life insurance offer a cash value?
They do, but this cash value accumulates slowly and does not add to the death benefit or your returned premiums.
So what is the purpose of the cash value?  Well, you can take out a loan at this cash value if you want. But like all other loans, it gets interest and you have to pay it back. So if you were to survive your insurance, when the insurance company returns your premiums to you, they will deduct that loan amount and interest. And should you die during the term, the insurance company will pay your beneficiaries the death benefit, but they will deduct that loan amount and interest.
So what if you decide you still want coverage after the term expires?
The two most common ways to continue coverage are to either buy a new life insurance policy or convert your life insurance policy to a permanent life insurance policy as long as that conversion option has not yet expired. Policy change is a bit complicated. Let's talk about it next week.
I & # 39; m game.
If you have any questions about life insurance leave a comment. Otherwise, see you next week when we talk about term conversions. Hey!
Image credit to: Ashim D’Silva