Here's What Happens When You Borrow From Your Life Insurance
You can borrow against next week with a payday loan and against next month with a credit card. You can even borrow against your own retirement with a 401(k) loan. But what about a life insurance loan? Well, it won't affect your afterlife, but your heirs might not appreciate it. If you can get past that inconvenience, a life insurance loan may be a workable option for fast, emergency cash.
According to an insurance report from research organization LIMRA, nearly 60% of U.S. adult household decision makers are covered by some form of life insurance. These policyholders sought out coverage for help with burial expenses, replacing income, leaving an inheritance, and paying off debt after they pass. Life insurance is less commonly sought out for the benefits it provides to policyholders while they're still living. Specifically, permanent life policies build up cash that can be tapped in an emergency.
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Source Fool.com
