QUESTION
Can anything be done with a term life policy worth about $50,000?
Asked on Mar 17th, 2014 on Estate Planning - Ohio
More details to this question:
In other words, can it be modified to a lesser amount so that an individual can receive cash from it ($25,000) or can someone who's homeless/jobless like myself receive a loan against it?
13 ANSWERS
Check with the insurance company as to what they allow in your case, but term insurance normally has no face value.
Answered on Mar 21st, 2014 at 8:39 AM
Neal Michael Rimer
Term Life Insurance policies generally have no "cash value" so there is no ability to "cash in" the policy, a part of the policy, or to borrow against the policy. A whole life policy (universal or otherwise) may give you other options. In decreasing the policy, the only advantage would be to decrease the annual premium cost.
Answered on Mar 20th, 2014 at 5:50 PM
Business Law Attorney serving Bingham Farms, MI
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James T. Weiner, P.C.
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A term life policy has no cash value and generally cannot be turned into cash. Only a whole life or universal life policy has cash value.
Answered on Mar 20th, 2014 at 5:50 PM
Probate Attorney serving Newport, OR
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Minor, Bandonis & Haggerty P.C.
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Maybe. It depends on the policy terms.
Answered on Mar 20th, 2014 at 5:50 PM
Commercial Contracts Attorney serving Boise, ID
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Peters Law, PLLC
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No, that is the downside of term, there is no cash value for the term policy.
Answered on Mar 20th, 2014 at 5:50 PM
Call the insurance company and ask them. Each company sets its own policies.
Answered on Mar 20th, 2014 at 5:50 PM
Taxation Law Attorney serving Glendale, CA
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Irsfeld, Irsfeld & Younger LLP
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A term life policy has no cash value. Generally, only way to get cash from it is to die.
Answered on Mar 20th, 2014 at 5:49 PM
Trusts Attorney serving Sacramento, CA
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Law Office of Victor Waid
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Talk to your insurance company who issued the policy.
Answered on Mar 20th, 2014 at 5:49 PM
Commercial Attorney serving Chicago, IL
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Ashcraft & Ashcraft, Ltd.
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Term life policies, unlike whole life policies, do not accumulate cash value. You cannot borrow against them and they cannot be surrendered for cash.
Answered on Mar 20th, 2014 at 5:49 PM
2 Awards
Term policies do not have cash value so you cannot get a loan against it.
Answered on Mar 20th, 2014 at 5:49 PM
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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A bit of background there are two types of life insurance, term and cash value. Cash value insurance has a number of different varieties - whole life, universal, adjustable life. Term insurance means that you make a payment each year and buy one year's coverage - there is no cash value. The only way to get money on a term life policy is to die while the policy is in effect.
Answered on Mar 20th, 2014 at 5:48 PM
Business Planning Attorney serving Livonia, MI
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Frederick & Frederick Attorneys at Law
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In most cases, there is no right or option to borrow against a term life policy. The reason for that is that the policy might eventually be cancelled or terminated, if the insured outlives the term in question. The insurance company would then be out of pocket and they do not put themselves in that kind of situation.
Answered on Mar 20th, 2014 at 5:48 PM
Personal Injury Attorney serving Marksville, LA
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The Bryan Law Firm L.L.C.
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My guess would be no, in that generally a term life policy does not have a cash value to borrow against. But you should contact your insurance company and get a definitive answer from them.
Answered on Mar 20th, 2014 at 5:48 PM