How to Cash-In Term Life Insurance

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Cashing in term life insurance requires you to follow a few general steps. Learn about how to cash in term life insurance with help from a professional financial adviser in this free video clip.

Part of the Video Series: Insurance & Personal Finance FAQs
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Video Transcript

This is Teresa Dentino, CEO and founder of The Financial 411 in Woodside, California. We're going to talk about term life insurance and why there is no cash value to a term life policy. First, let's talk about the difference between term and whole life insurance. In term, it is specifically insuring an individual for a specified term. Which is usually one year at a time. Also the premium on a term life policy will be considerably less than a whole life policy. In the term life premium there is no extra amount being paid by the owner that goes to a dedicated savings and investment plan. For example, in whole life you have a savings and investment portion within the whole life policy. And a portion of your premium goes toward funding that savings and investment portion. In term life, again, the premium will be less than in a whole life policy and that is because the insurance company is simply taking only the amount they need to accumulate enough to pay your death benefit. There is no extra portion of your premium that is then being applied to a savings and investment account. As a result, your term life insurance is less expensive but there will be no cash value that you can access. This is Teresa Dentino, CEO and founder of The Financial 411 in Woodside, California.

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