03 Sep Life Insurance That You Can Borrow From: A Financial Safety Net
Life Insurance That You Can Borrow From
Did you know that some life insurance policies allow you to borrow against the cash value you’ve accumulated? This feature can provide a valuable financial safety net, offering liquidity when you need it most.
Permanent Life Insurance policies, such as Whole Life and Indexed Universal Life (IUL), are designed not only to provide a death benefit but also to build cash value over time. As you pay your premiums, a portion goes into a savings component that grows on a tax-deferred basis. Once you’ve built up sufficient cash value, you can borrow against it—often at favorable interest rates.
This option can be a lifesaver in times of financial need, such as paying for unexpected medical expenses, funding a child’s education, or covering a down payment on a home. The best part? You’re not required to pay back the loan during your lifetime. However, it’s important to note that any outstanding loans will be deducted from the death benefit when the policyholder passes away.
Borrowing from your life insurance policy is a flexible and convenient way to access funds without having to go through the lengthy process of securing a traditional loan. It’s like having a built-in financial safety net that you can tap into when life throws you a curveball.
Life Insurance That You Can Borrow From: A Financial Safety Net
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