Contact your company or agent and have them send you the necessary loan forms. You will also need to know the loan value of your policy. It is not always a good idea to take a loan on a policy. The amount of the loan plus accrued interest will be deducted from the death benefit should you die. If you do take a loan make sure you at least pay the interest every year.
You may not want to borrow at all if you can access withdrawals to basis without a taxable event. There are rules that govern this specific aspect of cash value access, but confirm with the life insurance company before moving forward with this idea.
The best way to borrow against a policy is to purchase the best accumulating cash value TAMRA compliant policy with the lowest policy loan cost. Keep in mind that the vast majority of cash value policies need time to accumulate enough cash value to access and that surrender charges could come into play, eroding the amount you may want to borrow.
There are several policy loan provisions in cash value policies. Here’s a quick inventory: zero net cost loans, wash loans, spread loans, direct recognition loans, participating loans. There policies loans can be fixed rate or variable with two sets of rates: current company practice and guaranteed contract.
.JPG){kind=avatar}
The best way to borrow against a policy is to purchase the best accumulating cash value TAMRA compliant policy with the lowest policy loan cost. Keep in mind that the vast majority of cash value policies need time to accumulate enough cash value to access and that surrender charges could come into play, eroding the amount you may want to borrow.
There are several policy loan provisions in cash value policies. Here’s a quick inventory: zero net cost loans, wash loans, spread loans, direct recognition loans, participating loans. There policies loans can be fixed rate or variable with two sets of rates: current company practice and guaranteed contract.