So, you’ve been retired for a few years now and life is changing. Maybe your kids are getting older and you want to have a big trip with them before they start families of their own, or they already have said families and you want to take a vacation with all the grandkids.
Your parents or another close family member may have just passed and left you a significant amount of money. Or, maybe it’s you that has just received a terminal diagnosis, and you’re working to make sure your family is taken care of after you’re gone.
Most commonly of all, though, you could just need more money for retirement. All of these scenarios can benefit from cashing in a term life insurance policy. Here’s how you can determine if that’s right for you.
Is cashing in your policy even possible?
Depending on the policy, getting a cash payment for it is definitely possible. In some cases, it’s best to do periodic withdrawals, but in others, you can get a lump sum to put towards something bigger (like paying off your house) all at once. This is done by contacting a company that specializes in finding the best quote for you to get the most money back on your policy, such as sellmylifeinsurancepolicy.com.
With professional help, you not only have the assurance that you’re completing the process correctly, but they can help you determine what portion of your proceeds are tax-deductible or not taxed at all, and how best to handle the money you receive.
How else can I use these funds?
Once the policy has been converted to cash, it’s up to you how to use them. If you’re like a lot of your fellow Americans, you probably didn’t save as much for retirement as needed. This money may be put directly into a savings account, preferably one that yields a high-interest rate so that you may leave as much capital in it as possible.
That way, you can live off the interest itself and let said capital keep making gains. Or you may put it into stocks. Work with a financial planner to find out what to buy in order to meet your financial and life goals.
Another option that may work for not only you but your family is to use the money to pay off your care and funeral costs if you’ve been given a terminal diagnosis. Having a plan in place can help to ease some of the stress on all of you, and so can writing out exactly what that plan entails.
Set aside money for medical bills to keep collectors from calling, and pay off any possible debts so that you can focus on time with your family. With what’s left over, put it into an account meant for funeral expenses to coincidence with other life insurance policies you’ve incurred over the years.
Are all of these already taken care of in your portfolio? If that’s the case, congratulations: the other great aspect of receiving cash for your policy means you can also use it on a trip for yourself and your significant other, or with your family. Airlines and home-sharing networks have made it easier than ever to explore new places without breaking the bank. So now, flush with case and time to burn, is when you should have the adventure of a lifetime.
Lastly, think about buying real estate. This could mean buying a lake home that functions as a place to hold family get-togethers, or a home for a child after a big life event, like getting married or having their own kids. Owning real estate can help a family for generations, especially as selling a home or land at the right time can also increase net worth.