How to Borrow Money Against a Life Insurance Policy

In this tough economy, more and more people are turning to borrowing money against their life insurance policies. If you have a permanent or whole life insurance policy, then you are allowed to borrow a percentage of money against your whole life insurance policy. This is a loan just like any other kind of loan is and will need to be paid back with interest just like all other loans. You must have the policy at least 5 years to acuminate enough money in the whole life insurance policy to borrow against.

Things You'll Need

• Permanent or whole life insurance statement.
• Permanent or whole life insurance policy.
• Calculator
• Bank account

Instructions

1. Figure out how long and how much money that you have paid into the whole life insurance policy. Gather together your monthly or annual whole life insurance policy statement and it will give you the amount of money that you have paid into the whole life insurance policy.

2. Sit down with your spouse and figure how much that you need to borrow against your whole life insurance policy. Generally, you can borrow between 75 and 90 percent of the whole life insurance amount. Keep in mind that you are going to have to pay this back to be able to keep the whole life insurance policy activated.

3. Locate the policy number on your whole life insurance policy and circle it with a pen. Also locate the customer service phone number on the policy and circle it.

4. Call the phone number on the life insurance policy. Follow the prompts on the menu until you get to a live customer representative.

5. Inform the rep that you have a whole life insurance policy with them and that you would like to borrow money against your life insurance policy. The rep will then confirm that you are who you say you are and confirm your policy and that you have paid in enough to cover the amount requested.

6. Give the rep your bank account information and the rep will then discuss the loan repayment terms with you and all of the necessary information that pertains to the whole life insurance loan. The rep will then either deposit the money into your bank account or have you come in to one of their local offices for the loan.

Tips & Warnings

• It generally takes up to 2 business days to receive the money into your bank account. Depending on the amount.

• As stated earlier, you can only borrow money against a whole or permanent life insurance policy.

• A loan against your whole life insurance policy is the same as all other loans. You have to pay interest on the amount and you have to pay the full amount back to keep the whole life insurance policy active.

Resources

• More Information on Borrowing Money Against a Life Insurance Policy