Life Insurance » Don't Drop Your Life InsuranceUse cash value2 of 7Consumers with cash value policies might not be able to skip premium payments without losing coverage, says Tommy Smoot, vice president of life product strategy and marketing for The Guardian Life Insurance Co. of America in New York."With (whole life) insurance, if you're in a situation where you can't pay your premium, you can actually tap into those values as a way to pay," he says. "It's called an automatic premium loan feature."How long policyholders can use cash value reserves to pay their life insurance premiums depends on how long they've owned the policy and the reserve they've built up, Smoot says. However, there is a catch. Automatic premium loans can prevent a policy lapse, but you'll also get charged interest. For whole life holders just looking for a little bit of financial relief, Smoot recommends using policy dividends to temporarily lower premiums. Share this story LinkedIn Delicious Reddit Stumbleupon Email story More on Insurance: Life insurance after 50 and 60 Does your toddler need life insurance? Life insurance from marriage to midlife Create a news alert for "insurance"
Life Insurance » Don't Drop Your Life Insurance
Consumers with cash value policies might not be able to skip premium payments without losing coverage, says Tommy Smoot, vice president of life product strategy and marketing for The Guardian Life Insurance Co. of America in New York.
"With (whole life) insurance, if you're in a situation where you can't pay your premium, you can actually tap into those values as a way to pay," he says. "It's called an automatic premium loan feature."
How long policyholders can use cash value reserves to pay their life insurance premiums depends on how long they've owned the policy and the reserve they've built up, Smoot says. However, there is a catch. Automatic premium loans can prevent a policy lapse, but you'll also get charged interest. For whole life holders just looking for a little bit of financial relief, Smoot recommends using policy dividends to temporarily lower premiums.
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