Can I Withdraw Cash from a Term Life Insurance Policy?
If you’re thinking about getting life insurance, you’re probably trying to decide which option is best for you. You may want to get whole life insurance, also known as permanent life insurance, seeing as it is a cash value policy. A cash value policy means that the money you pay every month in the form of your life insurance premium builds up in value, and you can access that money to use as your own. There’s a pretty big drawback to whole life insurance, however, and that’s the price tag. If you need to save money in the short term, and whole life insurance just doesn’t work with your needs right now, you can get what is called term life insurance. Term life insurance however, is a lot like car insurance: you’re simply paying for the risk, and every premium you pay simply goes to the insurance provider’s profit margin. When your term life insurance ends, that’s it – you won’t get any money back for anything. This means that since term life insurance is not cash value insurance, there’s no money for you to withdraw.
Think of term life insurance as you would renting a house. You’re not putting any money into the long-term nature of your relationship, you’re simply paying on a month-to-month basis for something that, when it’s over, you simply walk away from and there are no ties to. Once you’ve paid your landlord your last month’s rent, he or she doesn’t owe you anything.
To learn more about term life insurance, whole or permanent life insurance, and withdrawing cash from whole life insurance policies, be sure to consult with a financial advisor. He or she can help you decide which kind of life insurance policy is best for your needs and your budget. It might be term life insurance, and it might not.