Fact vs. Fiction Archive

Policy loans are an attractive, easy way to access funding.

They are an attractive benefit but require careful planning. A policy loan puts up your policy’s cash value as collateral. If you defer your loan interest, it will be added to the next year’s loan principal. If unwatched, your loan may exceed the maximum collateral limit. Then, if you choose not to make a repayment, the insurance company will recover the amount due from your cash values, potentially resulting in termination of your life insurance.

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