Can I Borrow From My Life Insurance Policy?

It is possible to borrow from an insurance policy, if the policy has a cash value. The policyholder will be required to pay interest on any money borrowed and the insurance company would set the interest rate. The decision of when to pay the interest, whether monthly or yearly is up to the policyholder. The policy owner also can decide how much they want to pay towards the principle balance on the loan. Policyholders need to be aware that they are not required to pay back the loan, but the accruing interest will deduct from any remaining cash value left on the policy. Borrowers that also choose not to repay the principle balance and instead cash in their policy, could be required to pay taxes on the money.