Friday, 29 July 2016

Steps to Borrow Money from Your Life Insurance

There are several reasons why you would need to borrow from your life insurance. Although your life insurance is not your conventional bank, some life insurance policy actually allows you to borrow from it. If you want to do this, you'd need to take these steps:

How much do you want to borrow?

This shouldn't be a vague amount of money. You should sit down and make a good calculation of the exact amount. When you're done with this step, proceed to...

Call Your Insurance Company

You'd need to be certain for sure if they offer such services or if your insurance policy allows for borrowing. Anyways, your insurance company will be the best person to talk over this with.

What's the most tax efficient way to get the funds?

Since you're looking to borrow some money from your policy, paying tax is only going to short you of the available money to be borrowed. As you discuss with your insurer, remember to bring this question up. The insurer will advise accordingly on the best possible way to achieve this.

Continue Paying Your Premiums

This is where people sometimes get it all wrong. If you withdraw or borrow from your insurance policy, you would still have to continue with the payment of your premium. Failure to do this would mean nullifying the policy and its resulting death benefit.

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