Understanding Life Insurance ‘Cash Value’

Whole life insurance and some universal life policies have a beneficial feature that is called “cash value,” or “cash surrender value.” Cash value increases over time as the insurance premiums are paid. If you are just starting out or if you are concerned about wealth management, an agent of Smart Way Insurance Agency in Sandy, UT can help with recommendations about the appropriate life insurance for your particular circumstances.

Here are some potential benefits that are incorporated in certain life insurance policies that build up cash value:

  • Cash Withdrawals/Borrowing: Some policies have a provision that allows limited amounts of cash withdrawals or borrowing against the cash value after the payments of a certain number of insurance premiums. These withdrawals/loans are usually non-taxable up to the number of premiums that have been paid.
  • Cash Surrender Value: This is the amount that an insurance company will pay to the insured person or the owner of an insurance annuity if the insurance policy is canceled prior to the maturity of the policy.
  • Cash Value as a Long-Term Investment: If a person starts paying insurance premiums at a young enough age, there is the ability for the cash value to exceed all the premiums paid for the insurance. On average, it takes between 12 to 15 years for whole life policies to reach this status. For universal life, the average time it takes is 15 to 20 years. This is a wonderful feature because at a certain age the insured has the ability to get all their money back that they invested in premiums and also had the benefit of insurance coverage for all of those years.

Insurance policies have different features regarding cash value. Talk to an insurance agent at Smart Way Insurance Agency, serving Sandy, UT and the surrounding area, to learn more about the investment characteristics and the cash value benefits for life insurance and to get a quote for the coverage you need.

Are Personal Vehicles Protected by Your Policy When Used for Business Purposes?

Coverage Exclusions are Well-Defined Relative to Using a Personal Vehicle for Business Purposes

As a business owner do you sometimes wonder about your liability when your employee is out on a client visit during a snowstorm using their own personal vehicle? The good news is that unless your business includes some type of livery service, such as transporting people or products such as food or flowers, their usual personal vehicle policy should provide the necessary coverage. The Smart Way Insurance Agency is here to provide the commercial insurance you need to protect your Sandy, UT area business.

While that is all good news, there are some considerations that must be taken into account when reviewing your commercial insurance portfolio. For instance, if your company is growing and your sales team members are spending more time on the road, you may want to look at acquiring a fleet of company vehicles for their use. Even if your employees use their personal vehicles for business reasons on a rare occasion, it makes sense to look into additional liability insurance to protect your company. 

Liability coverage can prevent or minimize any claims against you that can have a negative impact on your financial health. In the unfortunate event that your employee is injured or suffers a loss, you will want to be protected. Another solution is to pay your employees the IRS approved mileage rate when they are using their car for business use. This reduces your liability and helps to eliminate any blurred lines relating to the responsible party should an accident occur.

Do you have questions or concerns about your coverage obligations to your employees in the Sandy, UT area? Contact the Smart Way Insurance Agency to schedule a consultation to learn more.