Can i borrow from my life insurance policy?

Question

Can i borrow from my life insurance policy?

Answer 1

It depends upon the type of policy you have, and the cash value in it, if the policy is the type that builds cash value (i.e. NOT term insurance). Check with your company's customer service and inquire as to the policy cash value. Also be careful as to whether or not there are fees/interest charged, as they typically are for loans. Partial withdrawals, or partial surrenders may decrease the death benefit. Be careful to consider whether you're going to keep this policy to maturity, because there could be tax consequences upon a policy lapse. Again, check with the company directly, as they are the only ones who can tell you everything about the specific contract that you have in place. Good luck.

Answer 2

Call your agent.  You may be able to get a loan OR get the cash value out and not repay it.

Answer 3

If you have some form of permanent life insurance—whole life, universal life, variable universal life—then you should be able to borrow against the amount of cash value the policy has accumulated. Early in the life of a whole life or universal life insurance policy, the cost of insuring against premature death is much less than the premium amount. The insurance company deposits the excess amount—less the company’s profits and fees—into a tax-deferred savings account. This amount is known as “cash value.” These funds are invested by the insurance company. Proceeds from the investments are credited to the account, increasing the cash value. These funds are available to you in the form of a loan or as a withdrawal. If you cancel the policy, you receives the cash value as the policy “surrender amount.” If you have term life insurance, then, no, there is no cash value and, hence, nothing to borrow against.

Answer 4

Look at your last annual statement and see what the cash value is. Most policies that build cash value take several years to build up to an amount that is worth while. You can also call the company and ask what your cash value is and what the loan provisions are. Universal life, whole life, adjustable life and variable life all have cash value components, term does not.

Answer 5

If it's a whole life policy, yes.

Answer 6

I have no idea.  You're going to have to call the company and ask.  

IF you have a cash value policy, and IF you've had it at least five years, you can usually borrow up to about 75% of the cash value - which is usually about 10% of what you've paid into it.  Then you pay the interest to the insurance company, and if you die before paying it back, they subtract the amount from the face value of the policy.

It's kinda like, you pay me $10,000, I'll loan you $1,000 of it back, at 15% interest.

Answer 7

depends on the type. If it's term coverage..the answer is a flat out no. If it's whole....yes, but with some conditions and provisions.