Non Direct Recognition Life Insurance is Money Management

author — Wed, 25 Aug 2010 10:16:50 +0000

Buying Non Direct Life Insurance is a means to establish a solid financial asset base that you can borrow against. It is a whole life policy that the company still pays dividends and interest based on your cash value even though you have borrowed against it. The interest rate you pay on the loan normally is offset by the dividends and interest credited to your account as if there were no loans on your policy.

With a Non Direct Recognition Life Insurance Policy you will be able to complete your own financing of major purchases and still grow a nest egg. The dividends accumulate tax deferred until they are used at a future date.

The bottom line is instead of carrying substantial consumer debt; you have the means to be your own bank with this type insurance.

You should buy Non Direct Recognition Insurance because failure to do so can result in loss of dividends until the loan is repaid. Just remember that loans on a Direct recognition Life Insurance is a policy that will eat up your cash value and keep in mind that dividends are based on your cash minus loans.

You need to use an agent that is familiar with this type of policy because setting it up properly is essential to maximize the financial benefits.

Advantages of Non Direct Recognition Life Insurance Policy

author — Thu, 29 Apr 2010 03:32:52 +0000

You may have encountered the term “non direct recognition life insurance,” with many aspects and concerns about life insurance, you might be wondering what does this really mean? In simple terms, non direct recognition life insurance policy is a type of whole life insurance where dividends will not be decreased when loans are taken from it. However, this may mean that your cash value could be taken away faster because the loans that you have will directly reflect on your cash value. So if you are planning to borrow from your whole life policy, it is advisable that you get only from a non direct recognition provider.

To access cash by borrowing from your life insurance policy or get a policy loan has it own list of advantages, following are some:

If you get your policy loan, your death benefits will not affected by the loan.
The same way with your compounded cash – both present and future, these are not affected by the loan either.
The rates of the loan are significantly lower as compared to other types of loans because they are 100% collateralized by your own cash.
It is possible to pay the loan any time by simply using your cash value.
The cost for getting a loan is offset by the growth of the cash value that you have within your policy. Hence, this results to making the real cost of your loan smaller, even possible negative over time.
If you failed to pay the loan before death, said loan will be paid by your beneficiary; with most of your death benefits still going to your beneficiaries.

To find non direct recognition provider to help you with your non direct recognition life insurance needs, you can click the “Contact Us” button at the top or check with your local life insurance agent.