The ABC’s of Policy Loans

The ABC’s of Policy Loans

Life insurance policies contain a variety of features and benefits that many insureds may not even be aware of. These can include a waiver of premium benefit that covers the premiums in case of disability or dismemberment. Policies may have an accidental death benefit, it can accrue cash value and dividends and build into a valuable asset for the future. A policy that builds cash value like whole life insurance may also have a policy loan provision. What is a policy loan, and how can it be a valuable aspect of a life insurance policy?

What Is a Policy Loan?

A policy loan uses the cash value of a life insurance policy to make cash available to the policy owner without having to “cash-in” the policy. This keeps the balance of the policy in force while making needed funds available.

Do All Policies Have this Feature?

No. Only cash value type insurance policies (like whole life or universal life) will build value that can be accessed through a policy loan.

What Can I Use a Policy Loan For?

Funds from a policy loan can be used for any purpose. They can be used to pay other debts, handle emergencies or be used for opportunities. You do not need to justify your use of a policy loan.

What Costs Are Associated With a Policy Loan?

There is usually a small interest rate associated with a policy loan from an insurance policy.

How is the Loan Paid Back?

The loan may be paid back directly through payments to the insurance company. It also may be paid out of the proceeds of the policy upon the death of the insured.

How Do I Know If a Policy Has a Loan On It?

You should receive a status report on the loan at least annually. This should show how much the original loan was and the accrued interest to date. You can also contact an insurance company and speak with an agent to request a policy status report.

II you have any questions about your life insurance policy or its benefits, contact one of our independent life insurance agents. Because we are independent, we are able to review the policies of any company. We can also quote you insurance rates from multiple insurance companies with just one phone call. Contact us and learn more about your life insurance today.

Leave a Comment





When Branches Become Brawls: Who Pays When a Tree Attacks Your House?

March 18, 2024

From Pet Rocks to Pokémania: A Funtastic Journey Through 50 Years of Fads

March 15, 2024

Don’t Be a Sitting Duck: Essential Cybersecurity Tips for Small Businesses

March 14, 2024

Beyond “My Beloved Spouse”: A Guide to Choosing Your Life Insurance Beneficiary

March 13, 2024

Rental Car Roulette: Should You Spin the Wheel on Extra Insurance?

March 12, 2024

Bundling Up Your Homeowners Insurance: A Money-Saving Masterclass (or Myth?)

March 11, 2024

Bringing Home Baby: A Guide to Navigating the Joyful Chaos

March 8, 2024

See It All, Secure It All: The Hidden Benefits of Video Surveillance for Your Business

March 7, 2024

Life on the Edge? How Your Hobbies Can Affect Your Life Insurance Rates

March 6, 2024

The Costly Consequences of a DUI: Beyond the Backlash

March 5, 2024

Home Sweet (and Secure) Home: The Dynamic Duo of Maintenance and Insurance

March 4, 2024

5 Hot Cities Millennials Are Flocking To (and Why They’re So Awesome)

March 1, 2024

From Ride-Sharing to Reality: 5 Billion-Dollar Ideas Born in the Last Decade

February 29, 2024

Unveiling the Different Players (and Why We’re Your Guide!)

February 28, 2024

Beyond the Beep Beep: Unveiling the World of Supercars

February 27, 2024

Home Sweet Home, Protected Home: Why Upgrades Need Insurance Check-Ups

February 26, 2024

Beyond Nicknames: The (Sometimes Bizarre) Tales of How American Cities Got Their Names

February 23, 2024

Small Biz Squad Unite! Why Independent Insurance Agents Are Your Secret Weapon

February 22, 2024

Cracking the Code: Cash Value, Loan Value, Surrender Value – It’s All in the Life Insurance Policy!

February 21, 2024

Buckle Up for Safety: Are Cars Getting Smarter Than Crashes?

February 20, 2024

Love Your Home, Love Your Coverage: Smart Tips for Homeowners

February 19, 2024

From Herbie to Christine: Cars That Stole the Spotlight (and Maybe Your Heart)

February 16, 2024

Decoding Your Business DNA: Why SIC Codes Matter (and How We Can Help!)

February 15, 2024

Beyond the Payout: 6 Unexpected Perks of Life Insurance You Might Not Know

February 14, 2024

AutoPay Your Car Insurance? Cruise Control or Speed Trap?

February 13, 2024

Don’t Gamble with Your Home: Decoding the Odds with Homeowners Insurance

February 12, 2024

Employee vs. Contractor: Sorting the Suit from the Solopreneur

February 8, 2024

Poppin’ Pills and Counting Coins: America’s Prescription Drug Dilemma

February 7, 2024

Car Crash Calamity

February 6, 2024

Simple Steps to Keep Your Home a Flame-Free Zone

February 5, 2024

Ditch the Dinosaurs, Embrace the Dill: Your Guide to Quirky Museums Across the USA

February 2, 2024

Home Biz Hero: Should You Suit Up with Business Insurance?

February 1, 2024

Ditch the Piggy Bank, Grab the Plan: Your Adulting Health Insurance Guide

January 31, 2024

Oh Deer! Crash Course on What to Do After Hitting an Animal

January 30, 2024

Unveiling the Origins of Everyday Expressions

January 26, 2024

New Year, New Armor: 6 Ways to Shield Your Business in 2024

January 25, 2024

Life Insurance: Who’s Who in the Zoo (of Coverage)?

January 24, 2024

Private Property Crash? Don’t Panic, Just Play CSI! (Well, Sort Of)

January 23, 2024

Big Game Halftime Shows We Can’t Forget

January 19, 2024

Professionally Awesome, Legally Untouchable

January 18, 2024

Don’t Fear the Four

January 17, 2024

Cruisin’ Through Time

January 16, 2024

Treasure Trove or Insurance Trouble?

January 15, 2024

Baby Name Game: From Mary to Olivia, 100 Years of Popular Picks

January 12, 2024

Ditch the Clichés, Cupid! Budget-Friendly Valentine’s Day Ideas That Spark Joy, Not Debt

January 12, 2024

Oops! Employee Mishaps Got You Down? Insurance to the Rescue!

January 11, 2024

Cracking the Code: Why Your Health Insurance Bill Isn’t One-Size-Fits-All

January 10, 2024

Beyond Driving the Basics: 15 Life Skills Young Drivers Need (Before They Need Them)

January 9, 2024

Homeowner’s Insurance Secrets Revealed: 7 Quirky Factors Affecting Your Rates

January 8, 2024

The Fab Four: Unveiling Surprises About the Beatles

January 5, 2024

Bricks and Mortar: Protecting Your Small Business with Comprehensive Insurance

January 4, 2024

New Year, New Resolutions: 5 Ways to Refresh Your Life Insurance

January 3, 2024

Roadway Chaos: Dangers and Responsibilities of Unsecured Loads

January 2, 2024

Unveiling the Value: Why Knowing Your Home’s Worth Matters

January 1, 2024

Business Size: From Mom-and-Pop to Market Leader

December 29, 2023

Life Insurance: Understanding the Benefits of Term Insurance

December 28, 2023

Ride Smart, Ride Protected: Understanding Motorcycle Insurance

December 27, 2023

Take Control of Your Homeowners Insurance: The Benefits of Paying Separately

December 26, 2023

Unveiling the Enchantment of Christmas: Traditions, Legends, and Global Celebrations

December 25, 2023

5 Most Unusual Places to Visit in Florida

December 22, 2023

Contact Us

-CONTACT US

OUR LOCATION

Have A Question?

We have an answer. Call us at 1-510-520-1883

1101 Marina Villiage Parkway, Suite 201, Room 251 Alameda, CA 94501

1-510-520-1883
CA License #0M21003

© Copyright 2024 Elisa Lee Insurance Agency, LLC  |   All Rights Reserved
Site by ICA Agency Alliance

1101 Marina Villiage Parkway, Suite 201, Room 251 Alameda, CA 94501
1-510-520-1883
CA License #0M21003

© Copyright 2024 Elisa Lee Insurance Agency, LLC  |   All Rights Reserved
Site by ICA Agency Alliance