How to Use Insurance Investments for Loans
Confirm that you have a life insurance policy that carries cash value., Consult your policy documents to find the current cash value of your policy, which should be amortized in the contract., Contact your insurance agent or the customer service...
Step-by-Step Guide
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Step 1: Confirm that you have a life insurance policy that carries cash value.
Other life insurance is as unsuitable for this as your auto insurance policy.
Cash value life insurance builds an accessible fund with each premium payment, in a manner not unlike the way your mortgage payments build up equity.
That's your money, but it is tied to the death benefit when the policy pays out.
If you take a loan from it, your death benefit will be reduced until you pay the loan back.
Whole life, universal life and variable life, as well as annuity life products, are the most common life insurance policies to carry a cash value. -
Step 2: Consult your policy documents to find the current cash value of your policy
Confirm that it's enough money to suit your financial needs.
Also like home mortgage equity, you may be surprised at how slowly the cash value builds. , Say that you want to take out a "policy loan" on the cash value life insurance policy in question.
Have the policy number ready. ,, Interest rates and fees for life insurance policy loans are often quite high as compared to traditional funding options.
They are, however, usually less expensive than payday loans and credit cards. , This may require you to sign documents and fax them to your insurance company.
In general you will receive your payment in the same form you make your premium payments--by check if you mail in payments or by direct deposit if you have an automatic draft. -
Step 3: which should be amortized in the contract.
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Step 4: Contact your insurance agent or the customer service department for your life insurance policy.
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Step 5: Ask about the interest rate
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Step 6: maximum loan and service fees for taking out the loan.
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Step 7: Compare the costs of accessing this money against other credit options.
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Step 8: Finalize the loan.
Detailed Guide
Other life insurance is as unsuitable for this as your auto insurance policy.
Cash value life insurance builds an accessible fund with each premium payment, in a manner not unlike the way your mortgage payments build up equity.
That's your money, but it is tied to the death benefit when the policy pays out.
If you take a loan from it, your death benefit will be reduced until you pay the loan back.
Whole life, universal life and variable life, as well as annuity life products, are the most common life insurance policies to carry a cash value.
Confirm that it's enough money to suit your financial needs.
Also like home mortgage equity, you may be surprised at how slowly the cash value builds. , Say that you want to take out a "policy loan" on the cash value life insurance policy in question.
Have the policy number ready. ,, Interest rates and fees for life insurance policy loans are often quite high as compared to traditional funding options.
They are, however, usually less expensive than payday loans and credit cards. , This may require you to sign documents and fax them to your insurance company.
In general you will receive your payment in the same form you make your premium payments--by check if you mail in payments or by direct deposit if you have an automatic draft.
About the Author
Edward Barnes
A passionate writer with expertise in DIY projects topics. Loves sharing practical knowledge.
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