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With over 76 years of experience, The Jordan Insurance Group is an industry leader in Life Insurance strategies and Employee Benefits. We strive for excellence through our due diligence in selecting products to satisfy our clients’ needs with proven benefit designs and tax strategies. Our Team utilizes a diversified multi-level approach in preserving, protecting and growing wealth for our business and individual clients.
Types of Life Insurance You Can Borrow From
You can find many types of life insurance policies and each type brings their own advantages and disadvantages. One of the choices you can have when you buy a policy is choosing whether to get term insurance or life insurance. Term life insurance comes with a death benefit for a pre-set number of years and is one of the most inexpensive types of insurance coverage. This type of insurance can cover many different situations. It can be useful for individuals who have just made a large purchase such as a house. It is also useful for young professionals who still have families at home. The Jordan Insurance Group, MD, Estate TaxHowever, keep in mind that term life has no cash value. On the other hand, whole life insurance policies can provide both death benefits and cash value. This type of insurance coverage gives you an advantage because this investment can be an asset in a way that you can actually cash out some of its equity. However, choosing this option will affect your death benefit by reducing its value proportionately. Most cases show that you will not have any significant asset to withdraw from your policy in the first three to five years. This policy is not like a bank savings account because your premiums have to accumulate into your asset where part of it is goes towards your death benefit. You can also use whole life insurance as collateral for a loan by allowing you to borrow cash using your insurance policy. Just like a loan, you must pay it back because the loan is secured against your asset: your life insurance policy. You will also be subject to interest which is a major disadvantage when using your whole life insurance policy as collateral for a loan. When you decide to buy a life insurance policy, plan ahead and decide on if your may need to borrow against your insurance policy in the future.
William Jordan
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