Can You Use Life Insurance As Collateral For A Loan?
- 63333 POINTSContact Meview profilePeggy MacePROMost of the U.S.Yes, you can use life insurance as collateral for a loan. SBA loans commonly come with the requirement that the borrower purchase a life insurance policy that will pay off the debt if the borrower should pass away before their obligations are fulfilled. Many people use No Exam life insurance for this purpose, so that they can get it in place more quickly.Answered on August 11, 2013+11 0+1 this answerflag this answerview more answers by Peggy Mace
- 5877 POINTSContact Meview profileStan Cox IIPROInsurance Adviser - Broker, SC Insurance Services, Oahu, HawaiiDepending on the type of policy you may be able to borrow from the cash value of the policy itself, or you may use the policy as collateral for a loan. Permanent life insurance policies have the ability to grow cash value - whole life is the best for this - but Term policies have no cash value and therefore are not usable as collateral for a loan. And not all banks will accept even Whole Life policies as collateral. You should check with the insurance company that your policy is with to see if there is an agreement in place where your policy may be used to secure a loan.Answered on September 28, 2015+01 0+1 this answerflag this answerview more answers by Stan Cox II
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