Many consumers overlook life insurance as a potential source of immediate funds. And, few are aware of the investment feature some policies offer. Please read the link below for more information. – Melissa Levin, CFP, CFS
“In tough economic times, people look everywhere — an IRA or 401(k), credit cards, even under their mattress — for emergency cash. But according to a recent survey by the National Association of Insurance Commissioners (NAIC), many consumers overlook life insurance as a potential source of immediate funds. And, few are aware of the investment features some policies offer.
“When thinking about everyday finances, life insurance is not top of mind for most Americans,” says NAIC Vice President and North Dakota Insurance Commissioner Adam Hamm. “According to our survey, more than two-thirds of consumers don’t know some types of life insurance include a cash value, and nearly half don’t think of life insurance as an investment option.”
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Variable Universal Life Insurance/Variable Life Insurance policies are subject to substantial fees and charges. Policy values will fluctuate and are subject to market risk and to possible loss of principal. Guarantees are based on the claims paying ability of the issuer.
Investors should carefully consider the charges and fees associated with a new insurance policy as well as any cost that may be associated with surrendering the current policy.
Both loans and withdrawals from a permanent life insurance policy may be subject to penalties and fees and, along with any accrued loan interest, will reduce the policy’s account value and death benefit. Withdrawals are taxed only to the extent that they exceed the policy owner’s cost basis in the policy and usually loans are free from current Federal taxation. A policy loan could result in tax consequences if the policy lapses or is surrendered while a loan is outstanding. LPL Tracking #1-039795