How to Determine the Amount of Cash Value in Your Life Insurance Policy
If you own a permanent life insurance policy, then you will have some amount of cash value inside your policy that you can access whenever you want for any reason. But do you know how much cash value you currently have in your policy? How can you find that out?
The answer to this question is relatively straightforward. There are several ways you can access this information. The first and perhaps the simplest method is simply to call the life insurance company and give them your policy number. (If you don’t have your policy number handy, they can probably look it up using your Social Security number.) They should be able to look up your policy and tell you how much cash value you have in it. You can also write to the insurance company or send them an email requesting this information and again, they should respond within a few days.
But the fastest and most convenient method of finding out how much cash value you have in your policy is, of course, just to look it up online. Most life carriers allow policy owners to access their policies through their web portals. Just have your policy handy and create a login, then enter your policy number into the search bar on the insurance company’s website. Your policy should come right up in most cases.
You will most likely see several numbers displayed on your policy’s home page. One number is the current cash value in the policy. Another number is the cash surrender value, which may be substantially less than the actual cash value because of surrender charges. It should also show the date of the policy’s inception and all of the premium payments that you have made over the life of the policy. It will also tell you whether your policy is still in force or has lapsed. It will list out any loans you have taken out on your policy and what interest rate you are paying on them if you have. Your policy’s cash value will be reduced by any loan amounts or cash withdrawals that you have made.
The policy’s cash surrender value is probably the most important number out of all of them, because it tells you what you’ll actually walk away with if you are forced to cancel your policy. The website may also tell you whether you can use your cash value to buy a term policy as well as the amount of term coverage your cash value can buy.
If you don’t need the cash value in your policy to cover expenses, you might want to consider trading it in for a higher death benefit. Most life insurance companies will do this if you ask them to. Or you could have the cash value cover the cost of its premiums, thus reducing your out-of-pocket expenses. But if you really want to get the most bang for the buck out of your permanent life policy, then you should look into selling your policy to a life settlement company. If you are at least 65 years old and have a cash value policy that you no longer want or need, then you may be able to get a substantial settlement for your policy. You will get cash up front (probably much more than the cash value) and the life settlement company will name itself as the new owner on the policy and pay the premiums from then on. Then, when you die, the settlement company will get the death benefit.
There are many different ways that you can find out the amount of cash value in your policy. Consult with your financial advisor or insurance agent about the cash value in your policy to see how you can get the most bang for your buck from it.