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Is Borrowing From A Life Insurance A Good Idea To Pay Off Bills?

General Insurance discussions and general chat

Is Borrowing From A Life Insurance A Good Idea To Pay Off Bills?

Postby Meridith » Sat Sep 30, 2017 9:42 am

You're probably better off just cancelling the policy, if you're that hard up for money.

Look at it this way.
The amount you borrow, is your "cash value".
Your cash value is a small amount that you paid in for your life insurance - the "overpayment".
You're borrowing your own money back, and paying interest to the insurance company, that keeps it.
Forever.
If you die while the loan is outstanding, they subtract the loan amount and interest, from the death benefit.


Cash value policies are, most of the time, a ripoff for the consumer.
They're not a scam - they're just not very efficient.
It's insurance for people who are really bad at math.
Meridith
 
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Is Borrowing From A Life Insurance A Good Idea To Pay Off Bills?

Postby Rufford » Sun Oct 01, 2017 1:12 am

Is it a whole life policy? If so, just cash it out and get out of debt. You would earn more in a savings account. Buy term life.
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Is Borrowing From A Life Insurance A Good Idea To Pay Off Bills?

Postby Athan » Mon Oct 02, 2017 12:32 am

It could be a good idea or it could be a bad idea. Which it is cannot be determined without knowing your situation, including you financial situation, which you probably shouldn't post here. You should speak with a fee based financial advisor.
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Is Borrowing From A Life Insurance A Good Idea To Pay Off Bills?

Postby Gerlach » Mon Oct 02, 2017 6:13 am

Usually I would cancel the policy and take the cash to pay off bills.
But a couple things might come into play.
Don't do it IF your an older person, in bad health, could not get other life insurance, are earning dividends that are more than the premium and/or had the policy for many, many, many years.


If none of those apply, then yes, I would cash in the policy and take out a term policy instead.
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Is Borrowing From A Life Insurance A Good Idea To Pay Off Bills?

Postby Corrick » Tue Oct 03, 2017 5:29 am

Is borrowing from a life insurance a good idea to pay off bills?

T.R.Y

T.H.I.S.

S.I.T.E

W.H.E.R.E

Y.O.U

C.A.N

F.I.N.D

T.H.E

B.E.S.T

S.O.L.U.T.I.O.N

F.O.R

Y.O.U
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Is Borrowing From A Life Insurance A Good Idea To Pay Off Bills?

Postby Jules » Thu Oct 05, 2017 9:56 pm

In general terms, if the interest rate is lower, then sure.
I would ask your financial advisor, but I would disagree with Zarnev in that I wouldn't care how the advisor made money if I trusted the advisor.

Whether you're single or married makes no difference.
A $10,000 loan here or a $10,000 loan there won't make much of a difference.
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Is Borrowing From A Life Insurance A Good Idea To Pay Off Bills?

Postby Delainey » Fri Oct 06, 2017 1:54 am

*Are you single? If so, then sure. But not if you are married and have kids. If something should happen to you, they may need the money more than your car.
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Is Borrowing From A Life Insurance A Good Idea To Pay Off Bills?

Postby Brand » Sun Oct 08, 2017 6:08 pm

Insist your step daughter and household start contributing to the family income immediately. If they don't, to find your self a cheaper location to live (my personal loan fee on a 4 bed room residence is not up to $1400 a month). Do away with the cable, web and cellphone telephones. If you happen to particularly don't feel you are able to do without the phones, change to a less expensive plan like Cricket or similar that is $forty a month (even $eighty a month for two telephones is half of of what you are presently paying). If all your wife can get for work is a part time job at McDonald's making not up to $500 a month-SHE must TAKE IT! I can not believe out of 4 adults you're the only one working a full time job. Bankruptcy will not do some thing for the pupil loan debt or little one aid, and i do not believe it is going to do anything towards the 401k mortgage either. So really all you're looking at there is the credit card debt and in all probability the previous landlord. Your take residence pay is not going to alter. Taxes and wellbeing coverage usually are not going to move down, and the baby support will proceed to come back out. You have to determine tips on how to survive what you have got left over or get the other individuals for your household contributing.
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