While the prime purchase of life insurance can be a life-saver in many ways there is still another useful way to use your life insurance policy to benefit your bank account. It can help you get qualified for a loan, or approved to be trusted to pay back a company when making a large purchase, like a new washer and dryer, or even make a down payment on a new house.
Yes that’s right, you can use your life insurance policy to improve your credit.
Buying life insurance not only protects your family’s financial security after you pass away, but you can protect and enhance your finances while you’re alive and well.
Life insurance can even work to improve your credit and make you eligible to get approved for other loans or big purchases. Here’s how:
How Life Insurance Can Help Your Credit Score
With your life insurance policy, you are displaying good investment skills, and you show that you have made good decisions regarding money. Banks and places that require credit checks consider this a good fiscal decision and take it into consideration when you apply for a loan, or make a purchase that require multiple payments.
You already are showing off your good money-handling and investment skills, but also, with certain life insurance policies, you may be able to take out money against the policy. If your policy lets you do that, you may have a better chance at getting approved to make the purchase if the company is aware that you can take out money from your life insurance to help pay for your purchase. Basically, these is the easy way to explain that your life insurance policy can count as an “in house line of credit.” The living benefits you receive from your life insurance policy can count as collateral for a loan or purchase you are trying to make.
How To Make This Work For You
To get the most out of your life insurance policy and redeem the most benefits for your credit, you need to consider a permanent life insurance policy, that has a cash value.
This cash value is an important factor. While having any sort of life insurance may give you a littler leverage applying for that loan, a life insurance policy that provide living benefits or has a cash value that you can borrow against will be more favorable to the banks. This is because it makes you less of a risk to them. They want to know that you will be able to pay back a loan that you take out, and with your living benefits that you receive from your life insurance policy, you are that much closer to getting approved for the loan or purchase.
With a larger policy, and a higher cash value, you are even more desirable to the banks.
While it may not directly effect your credit score, banks and companies look into many factors when approving loans, withdrawals and big purchases, in order to get a feel for your financial responsibility and see if you will be a risk to the company.
Not only will your life insurance be a smart decision to insure your life and your family to keep them safe, but it will also secure your financial status and help you get further in life. <
If having a life insurance policy wasn’t already appealing enough, due to all the wonderful benefits as well as the sense of security you get, it has now become even more of an asset to your future financial plans.