Loan from Whole Life Insurance policy

[singlemomslovedisney]

Hello All- I have a whole life policy and I am not sure if I should borrow from it. Or is is better not to touch it. I already have a great insurance policy from work, this is a policy my mother had for me.

Has anyone ever borrowed from their whole life insurance policy? How does work, how do you pay it back.

 

[bumbershoot]

My in laws took a loan from MIL's insurance (and years later FIL forged MIL's signature and took another loan without her knowing).

You have to keep paying premiums AND you're paying back the loan bit by bit. Not easy to do.

 

[moongirl]

Do you own the policy or does your mother? Have you considered cashing it out completely if you are the owner of the policy?

You should call your insurance agent and discuss the particulars as they vary according to your policy. If it is a whole life policy that has been paid on for many years, you should be able to cash it out completely. You will have to pay regular income tax on a cash out so keep that it mind if you go that route. If you already have enough term insurance and you need the money, perhaps cashing out the policy is a better option for you. You could treat it as a loan and, instead of investing back into the insurance policy, invest in something that will give you better returns especially if you already have plenty of low-cost term insurance.