How Do I Borrow From My Life Insurance Policy?

How Do I Borrow From My Life Insurance Policy?

You can borrow from your life insurance policy by taking out a loan against the cash value of the policy. Here's how it works:

• Determine eligibility: Not all life insurance policies have a cash value component that can be used as collateral for a loan. Check with your insurance company to see if your policy is eligible for a loan.
• Calculate the loan amount: The loan amount you can borrow will depend on the cash value of your policy and any outstanding loans or policy loans. Your insurance company can provide you with the exact amount you can borrow.
• Submit a loan request: You can request a loan from your life insurance company by completing a loan request form.
• Repay the loan: The loan must be repaid, usually with interest. If you do not repay the loan, it will be deducted from the death benefit paid to your beneficiaries when you pass away.

Borrowing from your life insurance policy can impact your policy's cash value, death benefit, and premiums. It's important to consider the terms of the loan and the impact on your financial situation before taking out a loan against your life insurance policy.