Your policy has a loan value spelled out in the policy that is the accumulate cash value less any administrative charges. The best thing you can do to find the loan value is contact the insurance company customer service and ask them, they will tell you what the loan value is and send you the necessary forms to take a loan should you decide to do so. It is not always in your best interest to take a loan on a policy. I usually recommend taking a loan as a last resort. There are some good strategies that involve taking a loan on a policy but you should discuss that with a good local agent who knows and understands your goals and various financial strategies to help you meet those goals.
In Canada, when you borrow against your life insurance policy the amount you can borrow in stated in the life insurance policy. Important to remember, when you ask for a loan quote, to ask what if any of the amount borrowed will be taxable. Borrowing against a policy directly from the insurance company is considered a "deemed disposition" and can trigger a taxable event. When / if you repay the amount you receive a "tax credit". Borrowing directly is private.
If you use the policy as collateral from a bank, the loan is not a "deemed disposition" and therefore does not trigger a taxable event. The amount you can borrow varies, however, guidelines range from 50% to 90% depending on the type of policy and investment.
There are consequence and alternatives to borrowing they should be discussed with a good local agent to ensure that you are informed.
On a planning note, there are a number of strategies, that leverage individual and corporate borrowing.
If you have further questions, contact me.
If you are in Nova Scotia, you can request a complimentary strategy session at www.jpw.ca.
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If you use the policy as collateral from a bank, the loan is not a "deemed disposition" and therefore does not trigger a taxable event. The amount you can borrow varies, however, guidelines range from 50% to 90% depending on the type of policy and investment.
There are consequence and alternatives to borrowing they should be discussed with a good local agent to ensure that you are informed.
On a planning note, there are a number of strategies, that leverage individual and corporate borrowing.
If you have further questions, contact me.
If you are in Nova Scotia, you can request a complimentary strategy session at www.jpw.ca.