make payment with life insurance

English translation: use cash value of insurance to make payments

GLOSSARY ENTRY (DERIVED FROM QUESTION BELOW)
English term or phrase:make payment with life insurance
Selected answer:use cash value of insurance to make payments
Entered by: Yvonne Gallagher

08:40 Sep 24, 2013
English language (monolingual) [PRO]
Bus/Financial - Insurance
English term or phrase: make payment with life insurance
The sentence I don't understand: "You can make payments if you like, pay interest only, or allow the contract to pay its own interest through borrowing against remaining cash value if there is enough."

Context details:
The article makes a comparison between life insurance and annuity.
It is pointed out, that while you can't borrow money from an annuity or use it as collateral, with life insurance, you can do both. You can borrow money from the cash value of life insurance, and you can also "make payments if you like, pay interest only, or allow the contract to pay its own interest through borrowing against remaining cash value if there is enough".

I don't get the meaning, especially the meaning of the second half of the sentence. Would you please explain it for me using simple English? Thank you in advance.
Ian Wang
China
Local time: 22:21
use cash value of insurance to make payments
Explanation:
The text says you can borrow money and use your insurance contract "cash value" as collateral.

When you borrow money from the cash value of life insurance, as long as the contract remains in force, there's no tax. You can make payments or pay interest by borrowing using the cash value (of your insurance) as collateral or, if you have enough cash value (remaining or left in your insurance) you can set up the contract to pay its own interest by borrowing from the cash value (if there's enough cash value remaining).

Hope this helps

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Note added at 1 hr (2013-09-24 10:08:26 GMT)
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cash value =surrender value or cashing-in value

http://en.wikipedia.org/wiki/Cash_value

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Note added at 12 days (2013-10-07 07:48:08 GMT) Post-grading
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glad to have helped
Selected response from:

Yvonne Gallagher
Ireland
Local time: 14:21
Grading comment
thanks
4 KudoZ points were awarded for this answer



SUMMARY OF ALL EXPLANATIONS PROVIDED
4 +2use cash value of insurance to make payments
Yvonne Gallagher


  

Answers


38 mins   confidence: Answerer confidence 4/5Answerer confidence 4/5 peer agreement (net): +2
use cash value of insurance to make payments


Explanation:
The text says you can borrow money and use your insurance contract "cash value" as collateral.

When you borrow money from the cash value of life insurance, as long as the contract remains in force, there's no tax. You can make payments or pay interest by borrowing using the cash value (of your insurance) as collateral or, if you have enough cash value (remaining or left in your insurance) you can set up the contract to pay its own interest by borrowing from the cash value (if there's enough cash value remaining).

Hope this helps

--------------------------------------------------
Note added at 1 hr (2013-09-24 10:08:26 GMT)
--------------------------------------------------

cash value =surrender value or cashing-in value

http://en.wikipedia.org/wiki/Cash_value

--------------------------------------------------
Note added at 12 days (2013-10-07 07:48:08 GMT) Post-grading
--------------------------------------------------

glad to have helped

Yvonne Gallagher
Ireland
Local time: 14:21
Works in field
Native speaker of: Native in EnglishEnglish
PRO pts in category: 24
Grading comment
thanks

Peer comments on this answer (and responses from the answerer)
agree  638556 (X)
39 mins
  -> many thanks Jo

agree  Veronika McLaren
2 hrs
  -> many thanks Veronika:-)
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