When people consider life insurance, they often envision a payout that only comes into play after their demise. However, permanent life insurance offers an additional benefit while you’re still alive: a cash value. This unique feature distinguishes it from term life insurance and can play a significant role in your overall financial strategy. Based in Clarkston, MI, The Ryan Insurance Agency offers a variety of life insurance products to cater to your financial needs.

What Does Cash Value Mean?

Cash value is a savings component integrated into permanent life insurance policies, such as whole life or universal life. As you pay your premiums, a portion contributes to building this cash value over time, in addition to covering the cost of insurance.

How Can You Utilize It?

Once a substantial cash value has accumulated, you can utilize it in several ways:

• Borrow Against It: You can take out a policy loan without a credit check, using your cash value as collateral.
• Withdraw Funds: You can access the money directly, although withdrawals may reduce your death benefit.
• Pay Premiums: Some policyholders use their cash value to cover future premium payments.

Benefits and Considerations

The cash value grows tax-deferred, meaning you won’t pay taxes on earnings as long as they remain in the policy. However, accessing it can have implications, such as reducing the death benefit or creating a tax liability if not managed carefully.

Maximize Your Policy’s Potential

The cash value in permanent life insurance isn’t just a feature; it’s a financial tool that can support your goals throughout life. Whether you aim to build wealth, prepare for unexpected expenses, or enhance your retirement strategy, understanding how it works is beneficial. Ready to explore your options? Contact The Ryan Insurance Agency in Clarkston, MI, to get started.