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Can I Borrow Against my Whole Life Policy?

Can I Borrow Against my Whole Life Policy?

Whole life insurance is unique in a lot of ways. First of all, it is permanent. As long as the premium is paid, you are covered. This means a death benefit will be paid to your family so that they can pay your final expenses in the event of your death.

The second feature about whole life insurance, which is one reason why so many individuals choose this option, is the cash value that is gained. The cash value allows the policy to serve as a type of investment or savings vehicle. It is more of an investment since the insurance company takes part of your premium and invests it into investments of their choice.


You should not be worried about the investments the insurance company chooses being bad investments. Just as you want to gain as much interest as you can, the insurance company wants to be successful in this area too. That means that they will find the best investments possible, and you can also rely on life insurance company ratings to help you put trust in your company.

Even if you are not into investing, that is no matter. You may be surprised that some of your accounts that you already have are investment accounts. If you have a 401K or an IRA through your employer, then you have two accounts that are investment accounts. You probably even chose your investments based upon the amount of risk that you are willing to take.

You should know that it does take time for the cash value to build, which is not unusual for any interest sensitive account. For instance, your savings account is an interest sensitive account and it takes a while for it to make an income. You can expect the same from your whole life insurance policy. But when it gains value, it is very worth the wait.

Using the Cash Value

You can use the cash value to your advantage. You can't expect to allow this money to accumulate and you not be able to use it somehow. The good news is that you can borrow from it just like you would borrow from a loan. This is a unique feature to permanent life insurance and one that you can enjoy.

If you find that you are in a situation where you need money, you can borrow the money, use it for whatever you need to use it for, and then pay it back with interest over time. This is a great way for you to successfully make it through hard financial times and for you to be able to accomplish and acquire things that you need and want. It's your money, so you can use it.

Think of it as you acting like your own bank. You don't, however, have to borrow money that doesn't belong to you and then pay it back to be yours. You also don't have to pay a high amount of interest in the process, as well as submit to a credit check just so you can borrow your own money. All you have to do is tell the insurance company that you want to take a loan from your policy, specify the amount, and then wait for the check to come your way.

Basically, the ability to borrow from your whole life insurance policy keeps you from having to go to a bank and borrow money. This is something that many individuals like because it keeps them from having an inquiry on their credit report. For those with bad credit, they don't have to worry about being turned down. For those with mediocre credit, they can avoid the high interest rates.

ING Transamerica Insurance and Investment Group American General Life Companies Prudential Genworth Financial Services SBLI Life Insurance Company

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