Woodmen of the World Modern Woodmen Insurance AND investment Ball Louisiana
I was recently helping my grandma with a few of her things as she is getting older, so she tells me about her situation. She explains she has a life insurance policy, with Woodmen of the World, that has an investment attached to it. I get to reading it, and she has $150,000 in coverage and a $60,000 cash value. The cash value is the so called "investment." She can use that $60,000 at any time, but if she does, she has to pay it back (WITH INTEREST) or it gets taken from her death benefit. You mean to tell me, I have to borrow my own money, and pay it back with interest?!?! And if i dont pay it back, it gets taken out of my death benefit?! Who would sell this crap? That was NOT explained when she first got it, rightly so, because i wouldnt have got it either. Worse is, if she never uses is, we dont get both. We only get the face amount of the policy. I have reached out to several other individuals who have Woodmen of the World, who says the similar. What a rip off!
1 Updates & Rebuttals
Financial Researcher
Omaha,Nebraska,
United States
Clarification / how Death Benefits work
#2General Comment
Sat, December 05, 2020
Death benefit loans are loans taken by a life insurance policyholder from their life insurance company. Loans are taken against the cash value of the policy, not against the death benefit amount. They have low interest rates and don’t have re-payment schedules. Borrowers choose to repay on their own schedule, or they may choose not to repay at all. Should they pass away without having repaid the loan, the outstanding amount (loan and interest) is deducted from their death benefit.
Death benefit loans are, more accurately, referred to as life insurance loans or policy loans. Death benefit loans are provided as a lump sum and borrowers can use the money for any purpose they choose, including in-home care, adult day care, assisted living, skilled nursing, or to modify their home to allow a frail elderly person to continue living at home. Each life insurance policy is different, but most will allow the insured to borrow 90-100% of the cash value for a death benefit loan. This loan is tax free, up to the total amount one has paid in premiums. However, at the time of one’s death, any remaining balance will be taxed.
The qualification process for death benefit loans is not complicated. Therefore, the time to receive the loan is fairly quick, typically within 30 days. Hope that clears up any confusion . Life insurance is Crucial this day and age. Reports like you have made scare people away from very helpful Resources. Woodmen is one of the oldest Benefit Society around and they are a wonderful place to invest money, and lay out policies for families so that your prepared for the death of a loved one and you know that you will be okay financially. Woodmen of the world is one of the best . No-one doubts that. Have a good day. And God bless -Tg