Syndicated Financial Columnist, Host of the weekly talk show Steve Savant's Money, the Name of the Game, Scottsdale Arizona
Video Transcript: Can I borrow against my life insurance contract? Well, if you have a cash value life insurance contract and it has cash that is exceeding your surrender period or your surrender charges, you'd more than likely can get to some of this cash. Some people borrow from their policy using policy loans. When you get past about the 15th year, you could also even take your money that you actually originally put in and take that out via a withdrawal.
Whether it's a withdrawal to basis or original premiums that you put in or it's a policy loan, you can take money out of your policy at any time. There's no 59 and a half rule like they are in qualified plans. A lot of people like to use life insurance as a sinking fund or a reservoir for cash value. Those policies and withdrawals to basis especially if it's done after that 15th year in the withdrawal period, those monies come out without taxation. It's a really good area to have some of your money in.
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Whether it's a withdrawal to basis or original premiums that you put in or it's a policy loan, you can take money out of your policy at any time. There's no 59 and a half rule like they are in qualified plans. A lot of people like to use life insurance as a sinking fund or a reservoir for cash value. Those policies and withdrawals to basis especially if it's done after that 15th year in the withdrawal period, those monies come out without taxation. It's a really good area to have some of your money in.