Can you borrow against your life insurance policy?

Yes, it is possible to borrow against your life insurance policy through a policy loan. This is a loan that is secured by the cash value of a permanent life insurance policy, such as whole life or universal life insurance. When you make premium payments on a permanent life insurance policy, a portion of the money goes towards the death benefit and a portion goes towards the cash value component. The cash value can be accessed through withdrawals or policy loans, which can be used for a variety of purposes, including borrowing money. To take out a policy loan, you would need to contact your insurance company and request the loan amount. The insurance company will typically require you to fill out a loan request form and provide information about the amount you wish to borrow and the repayment terms. The loan amount that you can borrow is typically limited to a percentage of the cash value of the policy. The interest rate on the loan is usually lower than other types of loans, but there may be fees associated with taking out the loan. It's important to note that borrowing against your life insurance policy can have an impact on the death benefit paid to your beneficiaries in the event of your death. If the loan is not repaid before your death, the amount of the loan plus interest will be deducted from the death benefit. Additionally, if the loan balance exceeds the cash value of the policy, the policy could lapse and the coverage would end. If you are considering borrowing against your life insurance policy, it's important to speak with your insurance company and understand the potential costs and impact on your policy. It's also important to consider other borrowing options, such as personal loans or home equity loans, before taking out a policy loan.