How to Cash in Life Insurance Policies
A life insurance policy isn’t just for death benefits, they are also very valuable if you need money with no other alternatives. Usually most people don’t buy a policy for the cash value unless it’s for retirement or college. When an emergency happens, cash value can come in handy. It is easy to cash out a life insurance policy, but be sure it’s the right option.
- Look at your life insurance policy to see if there is cash value available. The first sheet in the policy will show you how much cash value you have, or you can also view a chart on the back of the policy to see how much cash value per $1,000 of insurance you have access to.
- Get the phone number of an insurance representative or the customer service line. At times insurance companies will have a website and get some information. You can even find the value of variable polices as well.
- Make a call to the phone number or go online to get a cash surrender form. You may even find it easier to take out a loan on the security policy if you don’t have other coverage, because the company can’t turn you down if money is available. You won’t have to pay back the loan but it will affect your coverage in some situations, and you could have increased premiums or it could collapse the policy.
- Go online and print some forms from the company website, it will have all you need for the policy, cash surrender and loan forms will be available. If you just want to borrow some funds, a lot of companies will work with you over the telephone.
- Complete the form and mail it in. The company will then send you a check when it processes the form. The total process will take three to five days, also factor in mail time.
- Include all types of gain on your taxes. If the cash value is higher than the premium amounts you paid you will have to pay ordinary taxes on the increase. If you choose to borrow out the funds, there isn’t any taxable incident until the policy collapses or cashed out.