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That depends on the life insurance policy. The policy must be one that builds cash value before a loan can be taken. Simply, if the policy is a 'term life policy' it lasts for a defined period - 10 years, 20 years, etc. - and charges a low premium. It doesn't build cash value you can borrow against.

'Whole life policies', on the other hand, have a part of the premium paid set aside for cash value. For this reason, the amount of premium charged for a whole life policy will be higher than the premium charged for a term life policy with the same face value.

NOTE: A loan is taken against the cash value of a policy, not the face value ( death benefit ). So if the face value is $10,000 and the cash value is $3,000, the loan would be taken against the $3,000.

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โˆ™ 2009-01-23 04:39:03
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Q: Can you take out a loan on a life insurance policy?
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Related questions

Do you get a 1099 if you take out a loan on a life insurance policy?

No. It is a loan, not income.


How do you take out a loan on your policy?

A policy loan is available only against a whole life policy, not a term life policy. Whole life accumulates cash value and a term life policy does not. The insurance policy will specify the interest rate that will accrue on the loan. The loan does not have to be repaid, but interest will continue to accrue if it does not. The insurance company will permit only a specified percentage of the cash value to be borrowed, and there must be a sufficient accumulation of cash value to a policy loan to be made. You should contact the insurance company directly to make arrangements for the loan.


Can you take a loan out of your insurance policy?

yes you can


Can you take cash from a life insurance policy without terminating the policy?

You can obtain a loan on the policy. This depends on the terms and conditions of the insurer.


Can you take a loan against your life insurance policy?

Yes, but only if it's a cash value type of policy, not a term policy.


Can you take the loan which exceeds the cash value of a life insurance policy?

If one is offered, then yes.


Can you take out a loan on employer paid life insurance policy?

No, you don't pay for it. An interesting thought, but it won't work.


Can you drawn funds from life insurance policy with United Investors Insurance Company?

If the policy that you have with United Investors is a whole life policy and has accumulated cash value then you can take a policy loan against it. And then you would pay that money back plus interest which is basically like paying yourself back. Or you can cash in the life insurance policy and take the cash value with you


Can you borrow against your life insurance plan or use it as collatoral for a loan?

You can take out the net cash value on your policy if you have cash value, or you can assign the policy as collateral for a loan, and change the beneficiary to be the lender.


Wash loan provision for insurance policy?

Not quite sure but I believe a wash loan is when you take a loan from your cash value life policy and pay it back with interest, most of the interest goes back into your own account with the insurance company taking a very small percentage.


Can you take out a life insurance policy on any individual you wish to?

no. there are laws for life insurance policy and is illegal to take it out to any individual


How would one get a loan for insurance?

One can get a loan for life insurance from a few locations. There are a few banks that will allow you to take out a loan using your life insurance payout as collateral.

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