question about life insurance policy

[TIM TIM TIM]

Well my mom got me one when I was little for 100k. She just gave me all the paperwork on it and all so I could look and see what it all is. When going over it it said something about 4% fixed interest? wtf is that? interest on a life insurance policy? also it looked like I could pull money out of it? (roughly 1300 dollars). How does this stuff work? I have never heard of being able to take money from a insurance policy.. its a universal policy also

[RX007CYM]

Pmed

[Trip]

Subscribed. I have one of these and not sure what to do with it.

[RX007CYM]

Pmed

[TIM TIM TIM]

thanks for the info rx007

[Joe]

thanks for the info rx007

Which was?

Just post it here.

[Serbonze]

It's probably a variable annuity life insurance contract.

[TIM TIM TIM]

This policy is gold. You have a permanent life insurance policy. There are several different types. This one is a universal life insurance policy (I know you posted it, but this is just how my mind is flowing this morning ).

4% is probably the guaranteed rate, but I know State Farm for example right now is actually paying 4.5% and they have a guaranteed rate of 4%. This is interest being earned on the cash value of the policy (That $1300 you mentioned).

What you need to do is call the agent on the policy and ask for an Illustration. If you would like I can go over the illustration with you at the next Mazda BBQ (if I am in town which is yet to be determined). Or you can ask to set an appointment with that agent and they can explain all of the features and benefits of the policy.

If mom took it out when you were young, the annual (Or semiannual or quarterly or monthly) premium should be very little. If you were to go out right now and get quotes I'll bet the cost will be quite a bit higher then what this policy costs. One of the great benefits of buying these when a person is young.

I wouldn't suck the money out of the policy just yet. With the illustration you can judge what that money will grow to in the years to come. Sometimes the interest generated on the policy can actually pay the policy premium and BAM, you have free life insurance (after you have already paid ).

Later on in life you can also turn the policy into an annuity, which in many cases can really supplement your retirement income.

Also, sometimes parents work with a life insurance agent to make the premium as little as possible and the policy actually relies on the cash value and generated interest so that the policy owner will only have to pay a very small sum to keep the insurance. Taking the money out of the policy could make it so that the cost of the policy later in life is no longer feasible because it wasn't funded correctly.

These are just some general statements about universal life insurance policies. The only way to have all of the facts is to get an illustration on your individual policy and go over it with someone knowledgeable in the field. Your agent should be more then happy to go over it with you because all life insurance agents know that the person most likely to buy life insurance is someone who already owns some.

Hope this helps!
This is the pm I recieved.