Introduction to Insurance

Insurance is a financial topic of paramount importance for every individual. Insurance is designed to protect the financial well-being of you and your dependents in the case of unexpected loss. Some forms of insurance are required by law, while others are optional. Agreeing to the terms of an insurance policy creates a contract between you and the insurance company. In exchange for payments from you (called premiums), the insurance company agrees to pay you a sum of money upon the occurrence of a specific event. That event may be as mundane as a visit to the doctor or as serious as a car crash, depending on the type of insurance.
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Borrowing Against a Life Insurance Policy

Because permanent life insurance policies result in the accrual of equity in a savings account, that account becomes an asset that may be used to acquire a loan. Unlike most loans, these are not accompanied by a schedule for repayment, and repayment is actually not required. If the loan is not repaid, the amount will simply be subtracted from the policy, reducing the death benefit. A loan against a life insurance policy is not the same as a withdrawal of funds from the account, and for that reason, the insurance company may charge interest on the money you receive from the loan. Despite this fact, a loan against your policy may still affect the dividend earned on your account. (more)

Introduction to Insurance

Borrowing Against a Life Insurance Policy

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