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I have a whole life policy and its got a cash value of 13k, 3k of which is dividends and monthly premium payments that have been made since it was opened 20 years ago
I am in the process of closing on a house and I was worried that I would not have enough to close, so I took out a small amount ($1000) as a loan from my whole life policy just incase I was short a little bit, I was planning to on paying it all back if I didnt need it.
Well I got the check thursday and deposited it (i have all documentation that the loan came from my policy and not some crazy off shore account, for the underwriter), and friday I signed on the house, closing date is this thursday (yay), i had mentioned to the loan officer that I did take out a loan, but it doesnt require a a repayment, but they (the mortgage place) would consider it a loan if it showed up on my credit report. my loan officer was telling me that loans get denied even after signing because people go out and spend a bunch on their CCs and take out loans and such right before they get the keys, and I am now worried that if this loan shows up on the credit report even though the payment will be sent to pay it off will be sent sometime this week that I will be denied.
I tried googling it, and I wasnt able to find out whether or not it shows on the report or not.
most likely no since very little is reported by insurance companies when it comes to life insurance.. it used to be said that if you wanted to hide money from bankruptsey courts throw the money into single premium insurance plans.
is the reason why because its a interest only type of loan or because its 'backed' by the value of the policy? just wondering in case someone else asks and i can answer and explain
heres a novel idea! Save the extra whole life premium, get term and put the difference in the bank or your own investments. You wont have to borrow back your own money,you will have the money.
nice folks at the insurance company,,, they will let you borrow back your own money and charge you interest to do so.
many will reduce or suspend your dividend too on the amount borrowed so check your policy.
Yep thats a big bonus....... Not!
Last edited by mathjak107; 12-05-2011 at 02:28 PM..
heres a novel idea! Save the extra whole life premium, get term and put the difference in the bank or your own investments. You wont have to borrow back your own money,you will have the money.
nice folks at the insurance company,,, they will let you borrow back your own money and charge you interest to do so.
many will reduce or suspend your dividend too on the amount borrowed so check your policy.
Yep thats a big bonus....... Not!
I know, I know but the 9+% rate of return I have gotten over the past 20 years of owning these (and the 6% I am still getting in this down economy) is WAY better then the .005% savings account rate....no suspensions of dividends either.
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