My Investopedia Posts

If I am using a loan to pay the premiums on a life insurance policy and I surrender the policy to take out the cash value, will I have to pay income tax on the loan and the accumulated interest?

Cash taken out of a life insurance policy is taxed if it is above your cost basis. The quickest way for you get to get an answer is to call… Read More

Is it better for a 34-year-old with a family of three to take a 20- or 30-year life insurance policy if I know that the premiums will significantly increase if I choose the 20-year policy?

If you think there is a possibility you will need life insurance for more than 20 years, then you should buy the 30-year term. You will probably spend less… Read More

Is whole life insurance a good option for my family of three if I have multiple retirement accounts and insurance policies already in place?

It could be a good idea if you want to have a guaranteed portion of your financial portfolio. Whole life insurance gives just about the best guarantees out there. Of… Read More

Does the IRS consider a life insurance payout to a minor, my 6-year-old child, as received income that I have to report?

Truthfully, I’m having a hard time wrapping my head around this question. Are you saying that your six-year-old child actually received a check from an insurance company? I have never heard… Read More

Is purchasing a $300,000 life insurance policy as a single 53-year-old with no children a good decision?

I think it can be a fantastic decision. Life insurance is a superb way to leave a legacy of caring for someone you love and support. It’s a financial product… Read More

Should I purchase term life insurance or whole life Insurance?

Permanent insurance is a unique product. Here are three reasons why you should buy it: 1. You are guaranteed to get a fantastic return on your money. Permanent coverage means… Read More

Is it wise to borrow against the payout of a life insurance policy to pay for a bucket list wish for my mother, who is in declining health?

The decisive factor here is not impacting the beneficiaries of the policy. That should be the priority if you’re considering reducing the face amount through a loan. If they would… Read More

How can I estimate the cash value of a Variable Life Insurance Policy that I purchased in 1985 and have paid up?

There’s no reason to estimate the cash value. Simply call the carrier and ask them what is the current value. I assume that you didn’t buy a product that has… Read More

Should I seek out legal services to attain the full amount of my father’s whole life policy, if the claims department determines I’m not eligible before the two-year policy standard?

I’m sorry for your loss. I also lost my father, a few years ago, and his demise started with a broken hip too. I don’t see any reason for this… Read More

What are the best investments that include an insurance component, for example life or medical insurance?

There are many annuities in the marketplace that provide a death benefit. This actually can be a value-added feature if you want your heirs to be “made whole” from your… Read More