How Much Can I Borrow From My Life Insurance?
0 POINTSContact Meview profileDavid RacichPROFountain Hills, ArizonaThis assumes you own a permanent form of cash value life insurance: participating whole life or current assumption universal life that uses differing crediting methods. Participating whole life uses spread loans and direct recognition loans. Universal life uses zero net cost loans, wash loans, spread loans and participating loans (indexed universal life.) The cash value account and the surrender cash value account holds the answer to the amount you can borrow, but keep in mind that borrowing can reduce your death benefit coverage and may have tax ramifications if the policy lapses, is surrendered or matures.Answered on May 27, 2013+01+1 this answer
0flag this answerview more answers by David Racich- 0 POINTSContact Meview profileDavid RacichPROFountain Hills, ArizonaThe amount of money you can borrow from your cash value life insurance policy depends upon several items. Was the policy designed for cash accumulation or death benefit coverage? What was the crediting method: interest rates, indice returns or separate subaccount performance? How long has the policy been in force and are there surrender charges that apply when taking out loans? And speaking of charges, what is the loan cost for borrowing from your policy. All these items should be addressed before borrowing from your policy. So, order an “in force ledger” to determine what you have then another “in force ledger” that demonstrates how much you can borrow and still keep the policy in force.Answered on July 8, 2013+01+1 this answer 0flag this answerview more answers by David Racich
37376 POINTSview profileDavid G. Pipes, CLU®, RICP®Business Development Officer, T.D. McNeil Insurance Services, Fresno, CaliforniaOnly permanent life insurance has “non-forfeiture” provisions. These are required in order to borrow money from a policy. The general purpose for these funds is to allow the policy to provide a level death benefit for a level premium. At any time, the company will give you those funds if you surrender your policy. They also allow you to borrow a significant percentage of the funds as a loan. There is nominal interest paid to the company for this loan but it can be taken without explanation. The death benefit is reduced by the amount of any outstanding debt.Answered on June 25, 2014flag this answer
21750 POINTSview profileJim WinklerCEO/Owner, Winkler Financial Group, Houston, TexasThat is a great question! When you look at your policy paperwork, you will see a bunch of numbers in the "cash value" section. This cash value is the amount in your policy that is available for you to borrow. There may be limitations on how much of that money they will allow you to borrow, so please contact your agent, or the company, and find out how much would be available for you. There is an interest rate on what you borrow, and it is wise to know what that amount is also. Please remember that whatever amount remains unpaid at the time that you pass will be subtracted from what the company pays your beneficiary; and that if the borrowed amount and interest becomes too big, it can cause the policy to end, so be careful, okay? Contact me if you need help, and thanks for asking!Answered on June 26, 2014flag this answer
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