can you borrow against the cash value of your life insurance and how do you go about doing it?

Answer 1

Yes you can borrow the cash value, but you will owe interest on it, which doesn't go back into the cash value. Just call the number on the policy and say you want to borrow money from the cash value.

When you borrow money from the cash value, you do not have to pay it back and it will not affect your credit score. However, if you don't pay it back, your cash value will continue to decrease every year because of the interest being charged on the loan. If you die someday and you didn't pay the loan back, the face amount of the policy will be reduced by whatever you owe.

For example, lets say you borrow $2000 and the face amount of the policy is $100,000. If you die tomorrow, your face amount will be reduced to $98,000. Next year, the amount you owe will probably be $2150 ($150 of interest).

Answer 2

Read the policy, you should have the option to take a loan from the insurance company at pretty good interest rates. Just make sure you pay it back, or at the very least always pay the interest. If you don't, the policy will lapse and be worth nothing. Once the policy has zero cash value, it no longer exist, it is canceled. Be sure to call your insurance company and ask about the pro's and con's of taking a loan against the cash value.

Answer 3

Term insurance doesn't have a cash value, but whole life does, and you can usually borrow against it. Talk to your insurance agent to get the proper forms for the request.

Answer 4

You can either loan it to yourself or you can do what is called a partial surrender where you get cash w/o paying it back. Which one is best depends on a few things.

1) Is this a short term need you would be able to repay in the near future (LOAN) or is this a long term hardship and the money is unlikely to be replaced soon (PART SUR)

2) What company issued and how long have you had the policy.
Some companies have what are called zero net cost loan privileges where they interest credited on the money you borrow gets a rate equal to your loan rate.

Also most companies continue to credit interest on teh money you loan out usually with a 1-2% spread so the loan cost can be minimal and you do not have to pay interest out of pocket but it i sbest to do so

Answer 5

If it's a whole life policy, then yes, if you've had it in place long enough. About 10% of what you've paid in goes to cash value, after five years. You can borrow that money, but the interest gets paid to the insurance company. If you die before you pay back your own money, it gets subtracted from the payout on the policy.

It's a ripoff.

Answer 6

If you have term insurance you can not borrow but with whole life you can--contact your agent or insurance company. They can give you all of the details.

Answer 7

you will might desire to pay earnings taxes on the quantity you come again above what you paid in. Taxable earnings = [money renounce cost] - [Sum of rates Paid with out interest] in actuality the investment constructive factors which you have not had to pay taxes on because of the fact it replaced into in a tax deferred existence insurance insurance. i'm not sure in case you are able to desire to pay one extra penalty such as you do in case you withdraw from an IRA or a 401K.

Answer 8

Yes,you can borrow it.Its easy.You know you just need some infomation on how to do it. Also you can only borrow it if it a whole life insurance.Need some infomation can e mail me at [e-mail] ,You know
it is the Financial industry business. We work hard for money, But rarely we understand how to make money work for us. we make money, and we save in the bank. The bank give us 1 to 2 % interest and they utilize our money to invest and they make more than 12%. They know how to make money work for them. Because of the growing demand, people wanted to know what the bank does to make profit. We have a similar formula to make money work for us. Do you want that? Money work for you rather than you work hard for money.

Answer 9

you go to the bank and ask try to use the bank with your accounts or get a loan against it at the credit union they may have better rates they will hold the policy or contact the insurance about a hold on the account or place it in escrow til the loan is paid