4 Little-Known Ways to Cash in on Your Life Insurance Policy

Posted by Douglas Hynek on April 20th, 2016

Life Insurance PlanMany people make shopping for life insurance a quick process. They do a bit of looking around, pick their policy, and that’s it.

But did you know that the right life insurance policies can also provide benefits while you’re still alive?

We’ve highlighted four important (but often overlooked) ways you can cash in on your life insurance policy:

1.     Accelerated Death Benefits

Accelerated Death Benefits (ADB) enables policy holders to receive cash advances if diagnosed with a terminal illness. These payments can help you cover medical expenses, hospice care, and other final needs.

Accelerated benefits often range between 25-95% of the final death benefit, though payments will depend on policy values, the terms of the contract, and other circumstances. Request a quote from your benefits advisor before exercising an accelerated death benefit claim.

2.     Policy Dividends

This type of participating life insurance policy lets you share in the performance of your company’s participating account.

It’s important to remember that, because they are based on actual results, dividends cannot be guaranteed.

3.     Cash Surrender Values

The cash surrender value is the amount policy holders are entitled to receive if they voluntarily surrender their policy before the insured event occurs or the policy matures.

This is a component of many permanent life insurance policies, especially whole life policies. Most will provide you with a schedule of guaranteed cash surrender values, which show you the amount of money you will receive based on the size of your policy and the number of years it has been in force.

4.     Policy Loans

If you want to access funds, but are not ready to give up your life insurance policy to do that, consider a policy loan.

Policy loans are commonly available for amounts up to the cash surrender value (less one year’s loan interest).

It’s important to know, however, that any outstanding policy loans will be deducted from the benefit payable if you die or surrender your policy.

Make Sure You Have the Right Insurance Policy

Do you know whether or not these features are part of your life insurance policy? Ask your insurance advisor to find out. Your participating life insurance could turn out to offer resources you didn’t realize you had!


Whether you need to supplement retirement income or cover temporary needs like mortgage payments and children’s education, we have an individual life insurance plan that will meet your needs. Contact an HFG advisor today to start planning for you and your family!

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About Douglas Hynek

Douglas Hynek, Principal Advisor at HFG, has over 10 years of experience in group and individual insurance design. He specializes in crafting and managing employee benefit and retirement strategies for small to mid-sized businesses, as well as financial and insurance planning for business owners and executives.

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