How do you borrow against or from a life insurance policy?

Question

I have a policy through State Farm and through my husbands VA, can I borrow from this and repay it?

Answer 1

Don't think so.

Its an emergency fund, in event of something serious - not a 0% loan!

Answer 2

You can only borrow on whole life policies that have a cash value (and only up to the amount of the cash value).  You cannot borrow on term insurance such as VGLI.

Answer 3

If the policy is some kind of permanent policy like a whole life or universal life policy then you can borrow against the cash value that has accumulated inside the policy.  You should be able to look at your initial policy, annual statement or call their policyholder service department to find out what your cash surrender value is.  

You cannot borrow against the death benefit.

Answer 4

Do you have any cash value?  Are you the policy owner?  Only the policy owner can borrow, and they borrow against the CASH VALUE, which is about 10% of the total amount you've paid into it.  You have to pay interest to the insurance company, and if the insured dies with a balance outstanding, the outstanding amount, plus interest & fees, is subtracted from the payout.

You will have to call the agents to ask about the cash value on these policies, IF you are the policy owner.