Borrowing from Gerber Life: Turning Cash Value into Cash Flow (and hopefully not Ramen Noodles)
Let's face it, life throws curveballs. Sometimes, those curveballs come in the form of unexpected bills that leave your wallet feeling lighter than a Kardashian's breakfast. But fear not, fellow Gerber Life policyholder, for you hold a secret weapon: cash value. Yes, that little pot of money growing inside your policy can be your knight in shining armor, or, more realistically, your helpful financial fairy godmother.
Now, before you picture yourself swimming in a Scrooge McDuck money bin filled with Gerber Life cash, there are a few things to know.
So, You Want to Borrow? Buckle Up, Buttercup!
First things first, borrowing from your cash value is only an option with whole life insurance policies. Term life doesn't have a cash value feature, so if you're rocking that, this guide might not be your cup of tea (unless it's an expensive cup of tea, in which case, keep reading!).
Secondly, borrowing is just that – borrowing. It's not free money, folks. You'll need to pay back the loan with interest. Gerber charges an 8% interest rate, which is pretty reasonable compared to some loan sharks I know (looking at you, credit card companies!).
How Much Can I Borrow, You Ask?
This, my friend, is the million-dollar question (well, not literally, but you get the idea). The amount you can borrow depends on the accumulated cash value in your policy. This value grows over time as you pay your premiums, so the longer you've had the policy, the bigger the potential piggy bank.
Here's the technical jargon: You can typically borrow up to 90% of your cash surrender value. Don't worry, you don't need a financial degree to understand this. Just remember, the higher your cash value, the more you can potentially borrow.
Borrowing Made Easy (-ish)
Okay, so you've decided borrowing might be the answer to your financial woes. Here's how to get the ball rolling:
- Contact Gerber Life: You can call them at 1-800-425-7542 or log in to your online account.
- Request a loan application: This will outline the specific steps and answer any questions you might have.
- Fill out the paperwork and send it back: Gerber Life will need some info to process your request, like how much you want to borrow and how you plan to repay it.
- Wait for approval: Once Gerber Life receives your application, they'll review it and let you know if you're good to go.
- Receive the funds: Once approved, you'll receive the loan amount, typically via check or direct deposit.
Remember: Don't borrow more than you can comfortably repay. Borrowing against your cash value can impact your policy's death benefit, so make sure you understand the implications before taking the plunge.
The Takeaway:
While borrowing from your cash value can be a helpful option in a pinch, it's not a free pass to go on a spending spree. Use it wisely, pay it back diligently, and hopefully, you'll never have to resort to ramen noodles again (unless, of course, you just really like ramen).