life insurance loan

[Czech-mate]

i have the type of life insurance policy that's cashable. does one normally have to pay back the loan?

my understanding is that the loan amount gets deducted from the payable amount but that the loan doesn't have to be repaid, especially after the policy has lapsed.

thanks

 

[rld]

i have the type of life insurance policy that's cashable. does one normally have to pay back the loan?

my understanding is that the loan amount gets deducted from the payable amount but that the loan doesn't have to be repaid, especially after the policy has lapsed.

thanks

Answering this question without seeing the policy is impossible. Read your policy.

 

[rexst]

i have the type of life insurance policy that's cashable. does one normally have to pay back the loan?

my understanding is that the loan amount gets deducted from the payable amount but that the loan doesn't have to be repaid, especially after the policy has lapsed.

thanks

re. life insurance policies that offer policy loans - the loan need not be repaid - loan is simply deducted from proceeds at death or surrender of policy

 

[euripides]

re. life insurance policies that offer policy loans - the loan need not be repaid - loan is simply deducted from proceeds at death or surrender of policy

Correct. You would likely be better off to borrow at a bank and post the insurance plan as collateral. You should normally get a cheaper rate.

To make money on a life insurance policy, just die! after checking the suicide clause!

 

[atlantica]

Correct, assuming you have a typical 'whole life' , you do not have to make loan payments, but interest is charged and compounded on the loan. The death benefit is reduced accordingly. you can normally not borrow more the 75 or 80% of the cash value. Do check that the loan does not exceed the adjusted cost basis or you may have a taxable issue. The ins. Company can tell you.

 

[player coach]

worst type of insurance. As well as mortgage insurance. Get informed. Stay away.

Correct, assuming you have a typical 'whole life' , you do not have to make loan payments, but interest is charged and compounded on the loan. The death benefit is reduced accordingly. you can normally not borrow more the 75 or 80% of the cash value. Do check that the loan does not exceed the adjusted cost basis or you may have a taxable issue. The ins. Company can tell you.