What is a Life Insurance Policy Loan? [Withdrawal Pros and Cons]

How do I take out a life insurance policy loan?

If you decide to move forward with a policy loan, your agent or the carrier’s customer service rep can help you. You will have to complete a form from your insurer and you may have to have your identity confirmed. They will process the loan request and you’ll receive the loan the same way you pay your premiums. For example, by check or direct deposit. The money should be sent to you or your account within several days.

Before any of this occurs, you need to strategize how you will pay back you policy loan. If not, you’re putting your policy at risk of reducing the death benefit, tax penalties or losing coverage.

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