I’ve had a whole life insurance policy for a few years now and I was wondering if I could borrow against it. I remember seeing something about this a while back, but I’m not sure how it works. Like, can I just take out a loan and pay it back whenever I want? Or is it more complicated than that?
Hey Oliver, Yes, you can borrow against the cash value of a whole life insurance policy—think of it like taking a loan using your policy as collateral. Unlike regular loans, repayment isn’t mandatory, but interest does build up over time. If you don’t pay it back, the loan amount is deducted from the death benefit. It’s important to understand the terms and interest rates, so check your policy documents or talk to your insurance provider for details.
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You can borrow from a life insurance policy as soon as there is enough cash value built up to take a loan in the amount you need. Depending on how your policy is structured, this can take several years to accrue.