Can you borrow against life insurance or use it as collateral?
This article was last updated:
This article was last updated:
Many people are not aware that they can borrow against their life insurance or use it as collateral. This can be a great way to get access to extra cash in an emergency. There are a few things to keep in mind before borrowing against your life insurance, but it can be a great option for those in need of quick cash.
Borrowing Against Life Insurance
Using Life Insurance as Collateral
Many people are not aware that they can borrow against their life insurance policy, which can be a way access funds in emergency circumstances.
You can use life insurance as collateral for a loan, but there are pros and cons to doing so. On the plus side, you can use the death benefit to pay off the loan if you die before it is repaid. On the downside, the loan will likely have a higher interest rate and you may have to pay taxes on the death benefit.
Life insurance can be a tax deductible business expense in certain cases. For example, if the life insurance policy is taken out on a key employee, the premiums can be deducted as a business expense. Additionally, if the life insurance policy is used as collateral for a business loan, the
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