Borrow Against Your Life Insurance

Hubby and I have life insurance policies with a cash value, therefore we borrowed against the policies 2 years ago.

Yes, we’re borrowing our own money. But the interest rate is typically well below commercial rates, and we can take our time repaying the loan. Do repay it, though. If we die before it’s repaid, the outstanding balance plus interest will be deducted from the face value of the policy payable to the beneficiary.

As a negative, that seems a small price to pay to get out of debt now, but it could be burdensome to our family or loved ones should we sleep the eternal sleep before paying it back.