Yes, if you own a whole life insurance policy from Globe Life, you can typically take money out of it by accessing the accumulated cash value. This can generally be done through two primary methods: making a withdrawal or taking out a policy loan.
Understanding Your Options for Accessing Cash Value
Whole life insurance policies build a cash value over time, which is a portion of your premium payments that grows on a tax-deferred basis. This cash value can be a valuable financial resource during your lifetime.
1. Policy Withdrawals
When you make a withdrawal from your Globe Life whole life policy, you are directly taking a portion of the accumulated cash value.
- Impact on Death Benefit: A key consequence of withdrawing money is that it reduces the policy's death benefit dollar-for-dollar. This means the amount your beneficiaries would receive upon your passing will be permanently lowered by the amount withdrawn.
- Repayment: Withdrawals do not need to be repaid.
- Tax Implications: Withdrawals are generally tax-free up to the amount of premiums you've paid into the policy. Any amount withdrawn that exceeds your premium basis may be subject to income tax.
2. Policy Loans
Instead of a withdrawal, you can borrow money against your policy's cash value. The cash value acts as collateral for the loan.
- Impact on Death Benefit: Borrowing against your policy allows you to pay back the money borrowed, which restores the death benefit. If the loan is not repaid, any outstanding loan balance and accrued interest will reduce the death benefit paid to your beneficiaries.
- Repayment: While policy loans do not typically have a strict repayment schedule, interest will accrue on the outstanding loan balance. Repaying the loan (including interest) is essential to restore your policy's full death benefit and cash value.
- Tax Implications: Policy loans are generally not considered taxable income as long as the policy remains in force. However, if the policy lapses with an outstanding loan, the unpaid loan amount could become taxable.
Which Globe Life Policies Allow This?
It's important to differentiate between policy types:
- Whole Life Insurance: These policies are designed to accumulate cash value, making withdrawals and policy loans possible.
- Term Life Insurance: Term life policies typically do not build cash value. Therefore, you generally cannot take money out of a Globe Life term policy in the same way you can with a whole life policy.
Key Considerations Before Accessing Funds
Before deciding to withdraw funds or take a loan from your Globe Life policy, consider the following:
- Review Your Policy: Always refer to your specific policy documents or contact Globe Life directly to understand the exact terms, conditions, and fees associated with cash value access.
- Long-Term Impact: Assess how accessing your cash value will affect your future financial plans and your beneficiaries' potential payout.
- Tax Advice: Consult with a financial advisor or tax professional to understand any potential tax implications based on your individual situation.
For more details on accessing money from your Globe Life policy and understanding its options, you can refer to information provided by Globe Life.
Comparison of Cash Value Access Methods
| Feature | Policy Withdrawal | Policy Loan |
|---|---|---|
| Impact on Death Benefit | Permanently reduces the death benefit | Reduces death benefit if not repaid; restored upon repayment |
| Repayment Required | No | No fixed schedule, but repayment (with interest) restores benefits |
| Interest Charged | No | Yes, interest accrues on the loan balance |
| Taxation | Taxable if withdrawal exceeds premiums paid | Generally tax-free unless policy lapses with unpaid loan |
| Availability | Reduces available cash value for future access | Cash value acts as collateral, still grows (less interest) |
