Can I Take A Loan From My Life Insurance?

  1. 63333 POINTS
    Peggy Mace
    Most of the U.S.
    Yes, you can take a loan from your life insurance if it has accumulated sufficient cash values to do so. Only Whole Life and Universal Life (or variations of those) accumulate cash value. To keep the policy intact, you must repay the loan with interest. Considering that you are borrowing the money from yourself and repaying yourself, taking a loan from your life insurance policy can be a great way to access cash when needed. Just be sure you understand all the in's and out's of taking out your loan.
    Answered on September 7, 2013
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  2. 61667 POINTS
    Steve Savant
    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 policies accumulate tax deferred and have differing account crediting methods:dividends, interest rate, indice and separate sub accounts. Two policy provisions that effect borrowing are surrender charges and policy loans. Policy loans provisions have two sets of rates: current company practice and contractual as well differing methods of charging interest: zero net cost loans, wash loans, spread loans, direct recognition loans and participating loans.
    Answered on September 7, 2013
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