An additional benefit of whole life policies is the fact that you can borrow against your cash value, usually at interest rates significantly
lower than market rates — between 6 and 8 percent. The rates are so low because the lender is assuming absolutely no risk — if you don’t pay back the loan, it can take the money from your account. When you borrow against your policy, you don’t have to pay any fees, and you can usually get the money in just a few days. If you die before you pay back the loan, the outstanding amount is deducted from the death benefit. If you terminate the policy, the outstanding loan balance is deducted from the cash surrender value.
lower than market rates — between 6 and 8 percent. The rates are so low because the lender is assuming absolutely no risk — if you don’t pay back the loan, it can take the money from your account. When you borrow against your policy, you don’t have to pay any fees, and you can usually get the money in just a few days. If you die before you pay back the loan, the outstanding amount is deducted from the death benefit. If you terminate the policy, the outstanding loan balance is deducted from the cash surrender value.
No comments:
Post a Comment