Which insurance companies provide this please?

[mysticMike]

Hello guys, I would like to take out insurance but would like one which in case of any sudden emergencies I would be able to borrow from it, like when my mom passes or should there be any sudden personal expenses. Any recommendations please and would I need to provide the reason why I would need to borrow the money?

 

[Todd King]

Only 2 types of life insurance that has a cash account. That would be Whole Life and Universal Life. Term builds no cash value.

 

[Todd King]

Only 2 types of life insurance that has a cash account. That would be Whole Life and Universal Life. Term builds no cash value.

However, I will caution that borrowing money from your policy isn't the best idea since it will either have to be paid back or it will affect the face amount in the end.

 

[mysticMike]

Thanks, only for some emergency would I ever do that and understood on having to pay back. In that event any idea what would be the paying terms, one lump sum or would work like a bank loan where you can pay in installments?

 

[VolAgent]

Thanks, only for some emergency would I ever do that and understood on having to pay back. In that event any idea what would be the paying terms, one lump sum or would work like a bank loan where you can pay in installments?

That is the beauty of cash value in a life insurance policy. Much different rules than a bank loan, credit and income don't matter.

Yes, most companies will accept payments versus requiring a lump sum. I would say all, but there may be the exception.

 

[mysticMike]

Ok but what would determine the amount you might be able to get in an emergency, for example, let's say you are paying $20 per month and after one year you would have accumulated only $240 but an emergency might require 5 or 10k, what happens in such a scenario?

 

[VolAgent]

Ok but what would determine the amount you might be able to get in an emergency, for example, let's say you are paying $20 per month and after one year you would have accumulated only $240 but an emergency might require 5 or 10k, what happens in such a scenario?

You can only borrow based upon the cash value in the policy. Also, the premium paid does not directly translate into cash value in the policy. It costs money to issue a policy and to have the coverage available. In a typical policy, all those expenses are front loaded, so the first few years of premium will generate little if any cash value. After the policy has been in force for some time, the cash value will grow faster than premiums due to interested and dividends (if paid).

 

[mysticMike]

Oh I see, well explained thank you. Any recommended reputable companies please?

 

[VolAgent]

There are lots and lots of them, even in New York. I recommend speaking with an agent.

 

[mysticMike]

Alright, appreciate the help!