How does your Life Insurance Cash Value Build?

If you’re considering purchasing life insurance or are exploring ways to maximize the benefits of your policy, you’re likely looking to answer the question, how does life insurance build cash value? A policy’s ability to accumulate cash value over the years can provide a significant benefit to a policyholder, as he or she may be able to tap into these funds in case of emergency or can use them to pass along to heirs. While many nuances that determine a policy’s cash value, there are some standard protocols that most insurance companies follow: Term vs. Permanent: One of the first things you have to determine when looking to answer how does life insurance build cash value is what type of policy do you have? For instance, term life insurance is only applicable for a certain period of time and does not acquire cash value while permanent life insurance does. If you think you may want to take advantage of the cash-value option, you’ll need to explore the best permanent life insurance policy for you. Type of Policy: There are a number of different permanent life insurance policies that build cash value, all in varying ways. Whole life policies lock in a rate of growth, which the company and policyholder agree to and which doesn’t change, while universal policies rely on current interest rates to determine the growth. Another option is variable, in which the funds are invested and cash value grows according to the success of the investments. Premium Payments: Cash value starts to build through the policy holder’s premium payments. Typically, insurance companies divert the payments into three distinct...

2 Ways to Get Life Insurance for Children with Cancer

When an adult is diagnosed with cancer, the fallout is life-changing; however, when the medical emergency strikes a young person, the impact is often even more overwhelming. Apart from the emotional toll of a child struggling with an illness, parents have to manage new challenges to their work/life balance, learn how to be patient advocates and find the financial support to enable the best treatment possible. Though no one anticipates their children will be diagnosed with cancer, it is important to plan ahead for the worst-case scenario, such as through life insurance for children with cancer. Life insurance can be a vital resource for those who are facing a serious illness. For instance, Life Credit’s Living Benefits Loans allow policyholders to borrow against their death benefit to pay for costs associated with conditions like cancer. There are also ways parents can extend the value of their life insurance to their children. One option is for a parent or guardian to purchase a standalone life insurance policy in the child’s name. Typically, these policies are structured as whole-life policies and build cash value over the years. Many allow policyholders to borrow against the value, which can be a source of help for cancer patients and their families; often, families with young children don’t have significant savings at their disposal, so being able to tap into life insurance for children with cancer can ease many of the financial worries families have so they can focus on helping their child get well. However, parents need to fully research the provisions of such policies, as many require children to be healthy for a...