You are here: Home Finances Financial Crunch ... Sources For ... How To Borrow Against ...
Information about all aspects of finances affected by a serious health condition. Includes income sources such as work, investments, and private and government disability programs, and expenses such as medical bills, and how to deal with financial problems.
Information about all aspects of health care from choosing a doctor and treatment, staying safe in a hospital, to end of life care. Includes how to obtain, choose and maximize health insurance policies.
Answers to your practical questions such as how to travel safely despite your health condition, how to avoid getting infected by a pet, and what to say or not say to an insurance company.

Sources For Getting A Loan

How To Borrow Against Life Insurance

Next » « Previous

7/9

Alternatives for borrowing money, using your life insurance as collateral are:

Cash Value

If your life insurance has a cash value, you can borrow most, if not all, of it. Interest rates are usually lower than commercial rates.

You don't have to pay the money back but you do still have to pay premiums (unless there is a waiver because of disability.) If you don't repay the debt, when you die, the amount that is outstanding plus interest will be deducted from the death benefit payable to your beneficiaries.

Check with the insurance company to find out what affect, if any, the loan will have on future dividends, premiums and cash value.

"Living Benefit" (Also known as "Accelerated Death Benefit.")

Your policy may have a "living benefit" also known as an "Accelerated death benefit." Under this provision, the insurance company advances you part of the death benefit, often as a loan. If the amount is a loan, it is repaid from the death benefit. The difference between the amount and the benefit goes at your death to your beneficiaries.

Even if your policy does not specifically say there is a living benefit, it is worth checking with the insurance company. They may be able to add the benefit - at no cost.

Friends And Family

You can borrow money from friends or family. See Friendly Loans Against Your Life Insurance Policy

Note: If you have a shortened life expectancy, or you are over age 65, you may be able to sell your policy in a Viatical Settlement or Senior (Life) Settlement.

Commercial Lenders

There are a few commercial companies that will loan you money against your policy. See A Commerical Loan Against Your Life Insurance Policy.


Please share how this information is useful to you. 0 Comments

 

Post a Comment Have something to add to this topic? Contact Us.

Characters remaining:

  • Allowed markup: <a> <i> <b> <em> <u> <s> <strong> <code> <pre> <p>
    All other tags will be stripped.