How Much Can I Borrow from My Whole Life Insurance Policy?

[saltydogs]

I would like to take out a loan on my whole life insurance policy, but I don't know how much. The issue is I don't want to change the dividend paid-up option, and I want the policy to pay the loan interest. In other words, I do not want to have any out-of-pocket payments towards the loan or policy, I want the dividends to continue paying the
annual premium.

Base Policy Face Amount: $100,000
Paid-up Insurance: $37,125
Base Policy Value: $17,564
Value of Paid-up Insurance: $11,097
Premium: $1,159/Annual
Current Dividend Amount: $1,306
Loan interest rate quote: 5.75%

 

[Full Throttle]

I would like to take out a loan on my whole life insurance policy, but I don't know how much. The issue is I don't want to change the dividend paid-up option, and I want the policy to pay the loan interest. In other words, I do not want to have any out-of-pocket payments towards the loan or policy, I want the dividends to continue paying the
annual premium.

Base Policy Face Amount: $100,000
Paid-up Insurance: $37,125
Base Policy Value: $17,564
Value of Paid-up Insurance: $11,097
Premium: $1,159/Annual
Current Dividend Amount: $1,306
Loan interest rate quote: 5.75%

No one here can answer that question, you'll need to speak with your agent and they can run an inforce illustration. If you no longer have contact with an agent, I would call the carrier direct (FYI: most aren't very helpful in my opinion).

Given the numbers you posted, it looks like it would be difficult to take out much and still have the dividends pay the premiums & loan interest. Over time as the PUA's and dividend base grows, this would be much more practical. If you are going to be charged loan interest, it is very likely that the money you pull out would still be used for the purpose of calculating dividends. All that means is it likely not upset the policy paying all the premiums for you (you would still receive the same amount in dividends), however, there still isn't much room for it to pay premiums and loan interest depending on the size of the loan.

What company is the policy with?

 

[arnguy]

Call your insurance carrier!

 

[jacobtn]

Call your insurance carrier!

they are in receivership.

 

[saltydogs]

My policy is with John Hancock. I have called the local office and the national office, without much luck. I waited 2 weeks for an inforce illustration that shows me my current dividend paid-up scale, with estimated values year-by-year up to age 100! Which doesn't answer my question, the same question I posted here on the forum. I simply want to know the maximum I can borrow without any out-of-pocket expense. Should I ask them differently? Maybe give them a loan amount, like $5,000, and work from there?

 

[WinoBlues]

What you are asking for should not be that hard for them to illustrate. Ask JH to refer an agent to you.
Or ask a friend or family member to refer their agent to you. Just hope they did not buy their insurance online.

My policy is with John Hancock. I have called the local office and the national office, without much luck. I waited 2 weeks for an inforce illustration that shows me my current dividend paid-up scale, with estimated values year-by-year up to age 100! Which doesn't answer my question, the same question I posted here on the forum. I simply want to know the maximum I can borrow without any out-of-pocket expense. Should I ask them differently? Maybe give them a loan amount, like $5,000, and work from there?

 

[dgoldenz]

My policy is with John Hancock. I have called the local office and the national office, without much luck. I waited 2 weeks for an inforce illustration that shows me my current dividend paid-up scale, with estimated values year-by-year up to age 100! Which doesn't answer my question, the same question I posted here on the forum. I simply want to know the maximum I can borrow without any out-of-pocket expense. Should I ask them differently? Maybe give them a loan amount, like $5,000, and work from there?

Since dividends aren't guaranteed, they can't tell you the maximum. They can illustrate assuming nothing ever changes based on the scale today, but it won't guarantee anything.

 

[BNTRS]

There are lots of ways to approach this, but the best one is with an agent. Start with the guy or gal who sold this policy, if he or she is no longer around, do as others have suggested and look for someone who can assist you. Two weeks for an inforce is a long time IMO.

Depending on the size of the loan, you could just let the policy borrow to pay loan interest, the use of dividends to purchase paid up adds will increase cash value faster than the borrowing to pay loan interest for a while.

 

[Larry Tew]

... the use of dividends to purchase paid up adds will increase cash value faster than the borrowing to pay loan interest for a while.

Unless of course this policy has direct recognition. In that case, you're screwed.

I couldn't resist. Really... I couldn't.

OK, I'm better now. Good advice, I concur.

 

[arnguy]

they are in receivership.

Doesn't anyone answer the phone there?