Is it Wise to Borrow Against Your Life Insurance Policy?

Although, most people think that a traditional life insurance policy is the one which offers benefits in case of death of the policyholder. However, with time several products got added to the initial policy to help you save and invest better. One of which is the feature of getting a loan against your policy.

But before you think of getting loan against your life insurance policy it is important to know if this lending will make sense to you. You may get in touch with your policy provider to analyse the impact of loan on your policy with in-force illustration.

Loan against life insurance policy

Whether taking a loan against your life insurance a good decision, let’s find out - 

Easy to borrow - It may be noted that borrowing from your insurance company will be easier since you are already their member. Here, the cash value of the policy acts as collateral against the loan. In case of failure to pay it back the lender can take away the cash value of the policy or the death benefits of the policyholder to compensate their claims.

Requires planning - One must plan cautiously and closely monitor the cash value and loan so as not to default and to manage your finances effectively. You can make use of in-force illustration to know the impact.

Plan the loan - You can only get the loan against your policy when you have built a substantial cash value. The right time to avail the loan can be discussed with the representative of your insurance provider to help you make the right decisions.

For more information related to this, read this full blog: How to Easily Avail Loan Against Life Insurance Policy