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Cash Value and Loans guides
Automatic premium loansAn automatic premium loan pays missed premiums from your cash value. How it works, what it costs, and the lapse and tax risks of leaving it running.Withdrawing cash value from a life insurance policyHow partial withdrawals from permanent policies work, what they do to the death benefit, when they are taxed, and how they differ from loans and surrender.Hybrid life and long-term care policiesHow hybrid life and long-term care policies pay for care or a death benefit, the 2026 $430-a-day tax limit, the costs and trade-offs, and who they suit.Life insurance as a college savings tool: the trade-offsUsing cash value life insurance to pay for college: how loans work, how FAFSA treats cash value, and how the costs compare with a 529 plan.Life insurance policy loans: how they work and what they riskHow a loan against cash value works, what it costs, how it is taxed, and how an unpaid loan can cut the death benefit or lapse the policy.Using life insurance for retirement incomeHow policy loans and withdrawals can supply retirement income, the tax and MEC rules, lapse risk and costs, and who this strategy suits and who should skip it.Life settlements: selling your life insurance policyHow selling a life insurance policy works, who regulates it, what rescission rights and disclosures to expect, and how the sale is taxed after Rev. Rul. 2020-5.Reinstating a lapsed life insurance policyHow to reinstate a lapsed life policy: the usual three-to-five-year window, back premiums with interest, proof of health, and when a new policy is smarter.Stranger-originated life insurance (STOLI): what it is and why it is restrictedHow stranger-originated life insurance works, why courts and regulators treat it as lacking insurable interest, and what the NAIC and NCOIL waiting periods say.Surrendering a life insurance policy: what you get and what it costsWhat happens when you cancel a permanent policy for its cash surrender value, how the payout and tax are figured, and the alternatives to compare first.Viatical settlements for the terminally or chronically illHow a viatical settlement lets a seriously ill policy owner sell a life insurance policy for cash, how it is regulated and taxed, and what to compare first.