What Are Your Options When You Can’t Afford The Premiums To Your Life Insurance Policy With A Cash Value?
In these difficult economic times, many people can not afford the premiums for their life insurance policies. When a life insurance policy has a cash value, there are several options available to the policyholder.
One of the most common and often automatic options is for the insurance company to extend term life insurance. The cash value of the policy, less any outstanding loans is used towards paying for a policy equal to the face value of the existing policy. The policy would be good for the length of time that the cash value could purchase. Once the entire cash value has been used the policy would no longer have value.
Another more attractive option would be to use the cash value to purchase another policy that is fully paid with less coverage or less insurance. This usually is a similar policy to the original life insurance policy.
The third and final option would be is to cash in the original policy for the cash value. This is considered a total surrender of the policy to the issuing insurance company.