Is it possible to borrow against your life insurance policy?

Question

I recently know of someone who has used money from their life insurance policy to get caught up on bills. I didnt know that you could do that.

Answer 1

let me explain this easily:

* insurance companies love to take your money by monthly payments but do everything to not pay your insurance when accidents happen

* that is why they want you to pay higher insurance premiums so they can get richer and later claim that it is your own fault that you lived an unhealthy life and that is the reason why they can not pay you the insurance for the accident

why do you need an insurance company really?

they don't give you anything back. they just take your money away. money that you could save and put into a bank account with high interest rate and get much back after many years

let us say you pay $250 a month for insurance which includes everything from life, car, etc

insurance company, 1 person:

1 month: $250

1 year: $250 * 12 = $3.000

5 years: $3.000 * 5 = $15.000

10 years: $3.000 * 10 = $30.000

15 years: $3.000 * 15 = $45.000

20 years: $3.000 * 20 = $60.000

let us say an insurance company has 20 million customers:

1 month: $250 * 20 million = $5 billion

1 year: $5 billion * 12 = $60 billion

they get rich on you, but when accidents happen, they won't help you or pay anything

let us say you instead put this money into your own bank account with a high yearly interest rate on 4%:

1 year: $250 * 12 * 1,04 = $3.120

2 years: ($250 * 12 + $3.120) * 1,04 = $6.364

3 years: ($250 * 12 + $6.364) * 1,04 = $9.738

4 years: $13.248

5 years: $16.898

6 years: $20.694

7 years: $24.642

8 years: $28.748

9 years: $33.018

10 years: $37.459

11 years: $42.077

12 years: $46.880

13 years: $51.875

14 years: $57.070

15 years: $62.473

16 years: $68.092

17 years: $73.936

18 years: $80.013

19 years: $86.334

20 years: $92.907

you see that by putting your money ($250 every month) into a 4% high interest rate bank saving account will generate a lot of money that you would get use of, instead of throwing your money out of the window to an insurance company that would likely never pay you back when accidents happen.

insurance companies are nothing but an accepted scamming bank

the only thing they can insure you, is that they take your money

Answer 2

Yes - if it's a whole life policy with accumulated cash value.

Answer 3

Yes, if it has any cash value.  You can usually borrow up to 90% of the cash value - NOT the face amount.

Example:  You've had a $100,000 whole life insurance policy for ten years, it costs you $1,000 a year.  Cash value, after ten years, is probably around $1100 or so.  You can borrow up to that amount.

Answer 4

Term Life does not build cash value but whole life insurance does.

Your policy should show in estimation of the accumulated cash value.

Usually the policy needs to be in place for at least two yours to have cash value.

If you take out a loan from your life insurance policy the loan reduces your face value (the amount your beneficiary gets) by an equal amount to the loan until the loan is paid off.

Hopes this helps

Answer 5

If you purchased some kind of permanent whole life or universal life policy then they usually have cash value that you can borrow against.  The cash values come from the premium that is leftover after the insurance company deducts the costs associated with your death benefit.  You can usually find out the current cash value that you can borrow against on your most recent statement from the insurance company or by calling their policyholder service department.  

If you die before you pay the loan back then the loan is subtracted from your death benefit.  If you cancel the policy before you pay the loan back then the loan is subtracted from your cash surrender value.  There may also some income tax implications if you do not pay the loans back in a certain amount of time.