Can You Borrow From A Whole Life Insurance Policy?

Shawn Plummer

CEO, The Annuity Expert

Can You Borrow from a Whole Life Insurance Policy?

Yes, you can borrow from a whole life insurance policy. Whole life insurance, a type of permanent life insurance, typically includes a cash value component that grows over time. Policyholders can borrow against this cash value.

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Understanding Whole Life Insurance Loans

Steps to Borrow from Your Policy

  • Check Policy Details: Review your policy to understand the available cash value and loan terms.
  • Contact Insurance Company: Reach out to your insurance provider to initiate the loan process.
  • Complete Required Forms: Fill out any necessary paperwork provided by your insurer.
  • Receive Funds: Once approved, you will receive the loan amount.


  • Scenario 1: A policyholder with a $100,000 death benefit and $20,000 in cash value borrows $10,000. The remaining death benefit, if they die before repaying, would be $90,000.
  • Scenario 2: Borrowing $5,000 from a policy with $15,000 in cash value, assuming a 5% interest rate, the policyholder would owe $5,250 after one year if the interest is not paid annually.

Whole Life Insurance Loan Overview

Source of LoanCash value of the policy
Impact on Credit ScoreNone
Repayment TermsFlexible, with potential impact on death benefit
Interest RatesTypically lower than personal loans
Application ProcessThrough the insurance company, no credit check required


Borrowing from a whole life insurance policy is a viable option for policyholders needing funds without affecting their credit score. It’s crucial to understand the terms and implications on the policy’s value and death benefit. Contact us today for a free quote.

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Shawn Plummer

CEO, The Annuity Expert

Shawn Plummer is a licensed financial professional, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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