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You can borrow money on many life insurance policies. Older policies (much older, that is) may have a low fixed interest rate that has not changed. Current whole-life plans, for example,will have a specified interest rate that may fluctuate.
Dividends, while not guaranteed, can be withdrawn instead of borrowed although there are ramifications. An experienced full-time broker is your best resource for specific additional information.
Syndicated Financial Columnist, Host of the weekly talk show Steve Savant's Money, the Name of the Game, Scottsdale Arizona
Permanent cash value life insurance have basically four crediting methods: dividends with participating whole life, interest rates with current assumption universal life, indices with index universal life and separate sub accounts in variable universal life. The account vales are subject to surrender charges as a factor for the amount you can borrow as is the varying interest charges on policy loans like zero net, wash, spread, direct recognition and participating loans.
Insurance Advisor, Lordship Insurance Services, California
You can borrow on any policy that has cash value accumulating in it. These include whole life, universal life and variable life policies. These policies take a portion of the premium to cover the insurance cost and the balance is applied to accumulating cash value. Some policies offer dividends and other credit interest directly.
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Dividends, while not guaranteed, can be withdrawn instead of borrowed although there are ramifications. An experienced full-time broker is your best resource for specific additional information.