Can I Take Out A Loan On My Life Insurance Policy?

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   Ted Ratliff

   Owner, SFS Associates,

   Yes as long as there is loan value in the policy.  A life insurance cash value is divided into two parts, the Surrender Value and the Loan value.  The Surrender Value is the money you would receive if you cash in or surrender your policy.  The insurance is no longer in force.  The Loan value is the amount of money you cn loan on the policy.  The insurance remains in force and if death occurs the loan amount is subtracted from the death benefit.  The loan amount is sometimes different from the surrender amount due to administration charges that may be built into the policy.  You cannot borrow the full face amount of the policy.

   Answered on June 18, 2013

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