How Much Can You Borrow Against Your Life Insurance Policy?
If you have a cash value policy, it will grow over time. The longer you’ve had your policy, the more cash value you’ll have access to. Every payment you make gets divided up: the insurer will take out the cost of your coverage plus any administrative fees, and deposit the rest in your cash value account. You also have the opportunity to earn interest on that cash.
Depending on your policy type, that may be a flat, guaranteed rate (whole life) or a variable amount that depends on the performance of a market index (indexed universal life). No matter how your account earns interest, it does so on a tax-deferred basis. That means you don’t pay any tax, which helps that money grow and compound faster.
The best part about cash value? You have access to it, making it a great financial backup for investments, unexpected expenses, or anything you like. How much can you borrow against your life insurance policy? As we mentioned above, most insurers will let you borrow up to 90% of your current cash value.
Want to talk to a real person about cash value life insurance? Call us at (800) 521-7873 and we’ll answer all your questions! Or click the button below to start with a free term life quote.
