Thursday, October 18, 2012

What Percentage Do You Get When You Cash Out a Whole Life Insurance Policy?

You may receive a portion of the cash value when you terminate a whole life insurance policy

Whole life insurance is a type of permanent policy designed to provide coverage for your entire life. Equity builds within the policy, resulting in real cash value that can be accessed in a number of ways.

Depending on the specific details of your whole life contract and how long the policy has been in force, you may also receive some of the cash value if you terminate the plan.

Tuesday, October 16, 2012

Tax on Withdrawal From Life Insurance

Life insurance withdrawals can be taxable in certain situations

Source: StockMonkeys (Flickr)
Permanent life insurance policies offer an additional benefit beyond providing heirs with money if you die. Equity typically accumulates in these products and can be withdrawn by the policy owner.

However, care must be taken when considering a distribution from life insurance cash values to avoid income tax liability and damage to the integrity of the policy.