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2011-06-28 02:36:15
2011-06-28 02:36:15

Term life insurance does not build a cash value. It simply covers the insured person for a certain term or period of time.


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the insurance company pays the insured the cash value that has accumulated in the policy.............

are paid up insurance proceeds paid to the living person insured taxable

Pure term life insurance. In this kind of policy, there is no cash value of the policy for the insured. The policy holder gets no tangible or monetary benefits as long as he/she is alive. Only the survivors of the insured can reap the benefits of this kind of policy. So, we can say that this type of policy has no cash value for the insured individual.

Not usually, though I can't say that it is impossible. Life insurance is not regulated like car and home so one particular company could promise you that. Generally the cash value is if the insured cashes in the policy and the face amount is paid to the beneficiary when the insured dies. I was a life insurance agent for 15 years.

The cash surrender value is the sum of money an insurance company will pay to the policyholder or annuity holder in the event his or her policy is voluntarily terminated. This is only before its maturity, or if the insured event occurs.

There are some types of life insurance, known as whole life, which in addition to paying a benefit when the insured person dies, also develop a cash value over time, as you pay premiums, which you can withdraw if you like, so they are really a combination of a savings account and a life insurance policy.

The sum of money an insurance company will pay to the policyholder or annuity holder in the event his or her policy is voluntarily terminated before its maturity or the insured event occurs. This cash value is the savings component of most permanent life insurance policies, particularly whole life insurance policies. Also known as "cash value", "surrender value" and "policyholder's equity".

Cash value of whole life insurance is referred to as the "Cash Surrender Value". The cash surrender value is money the policyholder is supposed to receive from the insurance company when surrendering the whole life insurance policy with cash value. The cash surrender value amount due is the sum of the cash value stated in the whole life insurance policy minus any surrender charge and any outstanding loans and interest due on the loans.

The cash value that develops in a whole life insurance policy is not "insured" in the sense that it is not guaranteed to accumulate at a rate greater than the minimum rate set forth in the contract. However, insurance policies that are issued by authorized (licensed) insurers may be considered to be "insured" in another sense. If the insurer encounters financial problems that require placement of the insurer into a rehabilitation or liquidation process by a state regulator, the involvement of the state insurance guaranty association may be triggered to ensure that claims are paid. The guaranty associations are creatures of state law, such that the issue of cash value would be determined according to the governing statutory law.

Not all insurance policies have cash value. Term life has no cash value. Whole life does have cash value. You will have to talk to your insurance company and tell them what you want. If you have a whole life policy with cash value, then withdrawing that cash is essentially like taking money out of a bank account; very simple.

Whole life insurance means the life insurance policy that:normally covers an individual until his or her death, unless it lapses due to non-payment of premium or is cancelled,builds up a cash value (called cash surrender value),pays a fixed death benefit, andwhere (unlike in a term life insurance) the premium amount remains constant despite the advancing age of the insured.The insured or policyholder may obtain a loan (called policy loan) against the accumulated cash value. For more information refer to link below.

the limit of a loan against the policy is the amount of net cash value you have on the life insurance policy. Up to 75% of the paid up value of the life insurance policy, irrespective of the sum insured amount.

A matured endowment is a life insurance policy where the current cash value has become equal to the face amount of the policy. The policy is mature. So, the insurance company issues the insured a check for the face amount (death benefit) even though the insured is still alive.

Cash value is a characteristic of whole life insurance (sometimes called "permanent insurance"). It does not exist in the context of term insurance. With a whole life policy, a portion of the periodic premium is used to pay the amount needed to cover the death benefit (determined by insurance actuaries), and a portion of the premium is credited to the cash value. VERY broadly, you might think of cash value as an element of savings that is built in to the insurance policy, but do not draw a parallel to a savings account as such. Cash value accumulates slowly, and is generally de minimus in the early years of the policy. However, the cash value is a store of value that can be accessed by the insured, according to the terms of the policy, once a certain amount of time has passed or an amount of cash value has accumulated. For example, the insured can usually take a "policy loan" against the accumulated cash value. Typically, the interest rate charged by the insurer for such a policy loan is lower than other sources of loans. Interest will accrue on the loan, and if the loan and interest is not fully repaid by the time the insured dies, the balance of the loan will be deducted from death proceeds. One of the reasons that whole life insurance is sometimes called "permanent insurance" is because there comes a point in the life of the policy when the cash value can support the future premiums and the insured does not have to pay further premiums. Stated otherwise, the policy becomes "fully paid-up" at a point in time specified in the policy. In contrast, with term insurance, the insured is, in a sense ,"renting" the death protection; it remains in force only as long as the periodic premium is paid. Further, if the insured does not die while the policy is in force (often anywhere from 10-30 years depending upon the duration selected by the insured at the inception of the policy and presuming that premiums continue to be paid), coverage terminates, no benefits are paid, and no "value" (such as "cash value") accrues. This does not mean that term insurance is not worthwhile. It is generally less costly than whole life, and therefore, a person may load up on term insurance when they are young and, for example, raising and educating children. This would be done to ensure that sufficient money is available to finance child rearing expenses upon a parent's premature death.

The cash value of something is the value before taxes. Net or Netto cash value is after taxes.

It depends on the terms of the policy. Generally, cash value is a term related to the surrender value. If you die under a normal life insurance contract, your death benefit is paid and that's all. Some companies offer a rider that allows payment for the cash value plus the death benefit, but that costs more because you are purchasing insurance for the total of both calculated over a long time.

There is generally not a special form used for a life insurance policy issued to a physician. That said, if you are concerned with the cash surrender value, a whole life insurance policy (rather than a term life insurance policy) is implicated. The cash surrender value changes (usually increases) as the policy matures. The amount of the cash surrender value is shown on a schedule on the declarations page of the policy. The declarations page is one of the first pages of the policy which identifies the insured, the policy number, the amount of policy benefits and other information.

The face value is what your beneficiaries will collect. The cash value is the excess of your premium payments over the cost of the insurance. Click here for more about life insurance cash value.

No, generally speaking, no term life insurance policies have cash value.

The website Insure shows one how to calculate the cash value of Life Insurance. Their model shows what could happen to the cash value and death benefit if one taps his/her cash value to pay premiums.

Cash value insurance can be "whole life insurance" or "universal life insurance". There are few differences on how the funds are invested and if dividends can be paid that would increase the cash value, but both types of permanent life insurance can accumulate cash value. There is also a type of term insurance that has a "return of premium" feature that will return all premiums back at the end of the term. This type of term life policy is not actually accumulating cash value because you only get back the premiums you paid.

Term insurance may or may not have cash value at some point. It has no value when it expires. For example, If a person bought term insurance at 30 which would expire at 70, it could have some cash value when that person was between the ages of 40 and 60. Term life starts losing cash value when people start dying. It becomes worthless when it expires. If you want to use your term life insurance policy, you will need to die before it expires.

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