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.

Funeral Insurance

Isn't it a shame we can't all take out funeral insurance on a dead investment? Probably if we could, then there would be far less likelihood of having any investment 'die' on us! I am getting very cynical in my wisdom as I grow older.

But now is not the time to sell your structured settlement policy. I think with Christmas just around the  corner some people are probably thinking of passing it in or at least taking out a cash advance against it. A small cash advance probably wouldn't do too much harm but to take out a large loan against it at this point in time is probably not the brightest idea for you.

Everyone (by that I mean the average Jill and Joe) are struggling this season with a cash flow shortage. Borrowing heavily against a soon-to-mature policy is not a good idea.

The reason I believe this is because the interest rate on borrowings will rise over the next 12 months and if your income is on the decline, you will end up with worse financial problems.

As always, it's your decision whether to sell or hold, and I am simply advising against it. Hopefully, I'm wrong. But what if I'm right?

Double Dip or Double Take?

The economic pundits of many news services and financial institutions are talking of the US going into a double dip recession. This morning though I notice it hasn't stopped the stock market any! They seem to be anticipating another round of feeding from the Government. Frankly, I think it is disgusting!

All I can visualise is pigs at the feed trough and if you are like me and come from a farm, you will feel my utter disgust with the financial institutions on Wall Street.

Don't sell a structured settlement just yet

If you are in the fortunate position of having a term insurance policy and you are seriously thinking of selling this structured settlement, may I strongly suggest to you not to sell just yet?

My reasoning for this is simple: Even though times may be tough financially right now, I believe they will be getting a lot tougher soon. Hold off on this as long as you can and start learning to live with less.

The whole world will be learning to live with less soon enough and if you have a financial settlement that is structured to bring in income on a regular basis in the form of an insurance policy, you will be better placed than most.

On the other hand, if your structured settlement comes from a court case where you have taken a bad debtor to court and won a settlement, if you suspect this debtor is likely to fail should a bad economic environment get worse, then this type of settlement could be a good one to sell off for the best price obtainable.

Anyway, they are just my two cents worth for today :-) 

Double Dip Recession Likelihood Recedes

According to many pundits in Europe, the US, Canada and some Australians, the likelihood of a double-dip recession is slowly receding. Good news indeed, but is it possible?

Is Greece still likely to have difficulties paying their bills? I believe there are so many unanswered questions still not resolved to make any firmer predictions.

I also worry about those analysts who 'talk up' the market. I just can't believe some of the hype that Wall Street would have us believe.

Until there are more controls put in place and the world's financial institutions are all operating under the same regulated guidelines, there can be no justice for smaller financial institutions which will always be at the mercy of the big boys.

It's time we all stopped being ruled by money.