Agent, Rural Mutual Insurance Co., Union Grove, WI
Yes, with some policies you can take a loan out from the life insurance policy through the issuing company if the policy has been in effect long enough to have accumulated some cash value. The amount that you will be able to borrow from the policy will depend on the amount of cash value accumulated and the restrictions placed on borrowing from the policy by the issuing company. As always read your policy completely to know the coverage and exclusions within the policy or contact your local agent to have them go over the policy with you.
Co-Founder, Coastal Financial Partners Group, California
If you own a permanent (cash value) life insurance policy policy loans should be possible. Each policy contains provisions which explain how policy loans can function for that particular contract.
As long as the policy loan does not grow too large relative to the cash value available in the policy, there shouldn't be a problem. While you don't have to repay the loan - it can be repaid out of the death benefit - care must be taken to ensure the policy is not caused to lapse as income tax would be payable in the year of lapse subject to all of the gain over the life of the contract.
If you have a permanent life insurance policy with cash value, you are most likely able to take a loan from the cash value to use for whatever you wish. Contact your agent or the customer service department of the life insurance company your policy is with. Ask for an illustration showing the effect of taking out the loan on your policy values, and how much you need to repay in the future.
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As long as the policy loan does not grow too large relative to the cash value available in the policy, there shouldn't be a problem. While you don't have to repay the loan - it can be repaid out of the death benefit - care must be taken to ensure the policy is not caused to lapse as income tax would be payable in the year of lapse subject to all of the gain over the life of the contract.