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The cash value can be borrowed from the insurance policy and an annuity purchased with it. Depending upon the insurer, you may be able to have the two transactions done with the same company (assuming you wish to buy an annuity product from that company).

Keep in mind, however, that the cash value withdrawal is a loan that accrues interest according to the terms of the policy. Therefore, in order to make the transaction worthwhile, the annuity must throw off sufficient income to make up for the reduction of value of the insurance policy due to accruing interest on the policy loan.

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Q: Can life insurance cash value be converted into an annuity?
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Related questions

Can a loan be taken on a life ins policy that is linked to an annuity?

Yes, most life insurance policies that accumulate cash value give you the option to take loans, not to exceed the cash value amount. It does not matter if the life insurance premiums are paid from an annuity.


When whole life cash value is converted to annuity is it taxable?

No, in that specific circumstance it is tax exempt. As a point of interest, this is known as a "1035 exchange."


What is cash surrender in insurance?

"Cash surrender value" also known as "cash value" or "policyowner's equity value" is the monetary amount an insurance company will give the policyholder or annuity holder if the policy is voluntarily terminated before maturity or before the insurable event happens, (ex. death, disability).


Would an annuity value calculator show you the present value of an annuity?

Yes, an annuity value calculator can show you the present value of an annuity. As you may know, the present value of an annuity is the current value of a set of cash flows in the future, based on a specified rate of return.


Where can one find cash for an annuity payment?

There is a company called Woodbridge Investments that will offer you cash for your annuity, if you wish to sell it. Otherwise you should contact the insurance company that provided you with the annuity and ask them.


What is Cash Surrender Value?

The cash surrender value is the sum of money an insurance company will pay to the policyholder or annuity holder in the event his or her policy is voluntarily terminated. This is only before its maturity, or if the insured event occurs.


What is surrender value?

The sum of money an insurance company will pay to the policyholder or annuity holder in the event his or her policy is voluntarily terminated before its maturity or the insured event occurs. This cash value is the savings component of most permanent life insurance policies, particularly whole life insurance policies. Also known as "cash value", "surrender value" and "policyholder's equity".


What is the relationship between present value factor and annuity present value factor?

Present value annuity factor calculates the current value of future cash flows. The present value factor is used to describe only the current cash flows.


What is the relationship between the present value factor and annuity present value factor?

Present value annuity factor calculates the current value of future cash flows. The present value factor is used to describe only the current cash flows.


What is surrendered?

The sum of money an insurance company will pay to the policyholder or annuity holder in the event his or her policy is voluntarily terminated before its maturity or the insured event occurs. This cash value is the savings component of most permanent life insurance policies, particularly whole life insurance policies. Also known as "cash value", "surrender value" and "policyholder's equity".


Whole life Annuity-life insurance?

Whole life insurance is a product that provides a death benefit, along with a feature that allows you to build up cash value. I am not exactly sure what you mean by Annuity Life Insurance, but typically speaking annuities are a type of insurance product that are geared primarily to build up investment value and then take out a guaranteed stream of income as a result. Read more on what is whole life insurance below.


Annuity loans are what type of loan exactly?

Annuity loans are when an annuity holder borrows money against the value of an annuity contract. It allows one to access funds without having to cash out their annuity immediately.