 | Advantages and Disadvantages of Cash Value Insurance
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Advantages
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Policies generally guarantee level premium
payments for life.
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Policies allow you to accumulate cash value
over time.
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Cash value insurance can provide life-long
protection. Because it doesn't need to be renewed, you no longer
have to worry that declining health will affect your insurability
(unless you decide to buy more insurance).
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You may borrow against your cash value
funds at any time, for any reason, although doing so may reduce
the death benefit available to your survivors if the loan is
not repaid before your death.
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You can make withdrawals from the cash
value account of some policies, although this will reduce your
level of life insurance benefit.
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Disadvantages
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During the early years of
a cash value policy, the premium will usually be significantly
higher than for term insurance.
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If you need coverage only for a short period
of time, your net costs will be significantly higher than if
you purchase term insurance.
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The internal costs and expenses associated
with a cash value policy can be difficult to understand.
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