What Type Of Life Insurance Can You Borrow Against

Borrowing from your life insurance policy allows a lot more flexibility in repayment. For example, when you borrow from a bank, you have monthly payments to make over a fixed term, whereas if you borrow from your life insurance policy, you can pay back as little or as much as you want at any time interval.. If you have a permanent life insurance policy that accumulates cash value, you can borrow money from the insurer using the cash value as collateral. However, this option is typically only available once your life insurance policy’s cash value has reached a certain size, which may take five to ten years of paying premiums.. You can borrow from whole life, universal life, indexed universal life, and variable universal life policies. These are the types of policy that can accumulate cash - basically all policy types except term life insurance. It is an easy process - just call up the insurance company and ask them to send you a check or wire the money.. You asked the question, “Can I borrow against my life insurance policy?” The answer is “yes,” though only if it’s a whole life policy with cash values and only up to the amount of the ....

Here at life insure we’ve done our best to write a huge range of articles to help you make the most educated decision you possibly can, and that’s why it’s important you know that you can borrow money against your final payout later in your life with whole life insurance.. However, as with any other type of loan, a loan against your cash value will charge you interest that comes out of your remaining cash value. For example, if you have $5,000 of cash value in a universal life insurance policy, you might be able to make a maximum direct withdrawal of $4,500, with the other $500 either remaining in the policy or being used to pay for administrative expenses..

You can borrow against permanent life insurance (also called cash value life insurance) policies that have enough cash value for borrowing. The two major types of permanent life insurance are Whole Life and Universal Life. Universal life includes fixed universal life, indexed universal life and variable universal life..