Oct 31
Tip for Borrowing Against Your Life Insurance Policy
If you have whole life insurance, have built up sufficient cash value over the years, and now need a loan, you should consider borrowing against your policy. Interest rates are usually lower than available from other sources, and interest may be tax deductible if the principal is used for investment purposes.
Be aware, though, that the loan's principal and accrued/unpaid interest are deducted from the payout in the event of death or redemption of policy -- so don't jeopardize the very reason you have life insurance by borrowing too much against it.
Comments
I just borrowed against from my life insurance policy and was told I needed to pay back the interest. Is that a yearly payment or a one time payment?
Yearly!
how much would it cost us if me and my husband took 20,000 out of his life ins. policy of 100,000 to pay off debt. the policy is only a couple years old? any options