Whole of Life Insurance Policy Can Make a Hole in Debt Consolidation

If you are fortunate enough to have a whole of lifeinsurance policy and are currently suffering under a big load of debt, then this insurance policy can be passed in to make a very big dent in your debt consolidation efforts. 

Years ago, when we all seemed to have more money because we had a whole lot less debt, people used to buy whole of life insurance policies. When these arrangements were entered into, everyone intended to have them as a back-up for the time when they retired or died. These whole of life insurance policies were seen as a ‘back-up’ for our families in their time of need after we died. 

The only thing that has died so far is our access to cash money. Most people today are cash short due to a number of reasons: 

• People today are often unemployed, unemployable due to age or lack of employment opportunities, or under-employed.
• Many people are paid less per hour than they need or are worth due to employers either suffering from their own debt crises or threaten that there are more workers out of a job wanting employment opportunities.
• People have used their credit cards to live between pay days and now find they owe more money than they are actually earning.
• Or we have all grown to expect to live a certain lifestyle through thinking we can have it all even when our pay packets don’t meet our lifestyle expectations. In other words, living beyond our means. 

 If you are finding difficulty each month in paying all your bills then maybe it is time to look seriously at some debt consolidation. If you can barely make the minimum credit card payment each month and you are holding a whole of life insurance policy then perhaps it is time to redeem this asset. 

A whole of life insurance policy is an asset and as such can be used as any other asset that you own. If you owned a house then you can use that as collateral for a loan and a whole of life insurance policy can be used in the same way. 

To use this whole of life insurance policy as an asset for a loan for debt consolidation or it can be sold outright by redeeming the accrued benefits (if any) with your insurance company.

In the Terms and Conditions (T&C) of the policy they will state there whether or not the policy can be redeemed. Some insurance companies have a clause in there that it cannot be redeemed earlier than on the insured person’s death while other insurance companies have different terms and conditions regarding when and how they will pay-out.  

Whichever way you decide to redeem and use your whole of life insurance policy it can make a hole in your debt consolidation considerations.