Borrowing and the Whole Life Policy

February 8, 2022 by Lucas Siegel

People generally purchase whole life insurance for the death benefit and the cash that accumulates in the policy. Unfortunately, accessing that cash can be more complicated than policyholders expect.

A common approach is to use the policy’s cash value as collateral against a loan. Borrowing to unlock value from life insurance is appropriate when your client wants to retain part of the death benefit for the beneficiaries. Any other options for liquidating life insurance — surrendering or selling the policy, for example — leave no death benefit for the policyholder’s loved ones.

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Originally Posted at ThinkAdvisor on February 2, 2022 by Lucas Siegel.