Life Insurance Policy Loans to Finance Relocating to Anchorage
by Dan Wolf
on Thursday, February 27th, 2014 at 6:00am.
Has relocating to Anchorage been something of a lifelong dream? A dream that you kept putting off for one reason or another? And now that reason has come down to the purely economic? Well, if part of the reason you put off relocating to Anchorage was because you are one of those people who did all the right things while deferring your dream, you just may possibly be sitting on more than enough money to finally fulfill that ambition.
And you may not even have realized that such a windfall of liquid assets was so close.
A whole life insurance policy differs from a term life insurance policy in that you are continually getting closer and closer to achieving a minimum dollar figure known as the cash surrender value. (Or, in some cases, known only as the cash value.) The money that you diligently and with great wisdom even you didn't know you possessed kept putting away every month so your family wouldn't have to worry in the untimely event of your passing has been inexorably climbing toward that cash surrender value.
And then exceeding it.
In which case, you may now be able to take a out loan on as much as 90% of the amount of that cash surrender value and have that money in your hands in as little as 5 to 10 days. Sound too good to be true? Are you already contemplating living out the reality of all those fantasies you've entertained of life in the Last Frontier? Wait, because it gets better.
Because the insurance policy is yours, this is a loan that requires no waiting for approval, which explains the unusually quick turnaround time. Think it can't get any better than that? Wait, because it gets better. Not only are interest rates on life insurance policy loans generally lower than average, in reality they are actually even lower than they seem. Because you aren't actually taking money away from your insurance policy, the full amount of the cash value that has accrued continues enjoy a rate of return. If you have been paying on that insurance policy long enough, you may actually be enjoying a rate of return that exceeds the amount of interest you are charged for the loan. This presents the possibility--however rare--of taking out a loan that is genuinely interest-free if you plan on paying off the loan accordingly.
And if your dream of relocating to Anchorage is big enough and the situation is appropriate, an even greater dream can be achieved. Enjoying all the benefits of a huge loan at no interest that you never pay back. Since the amount of the loan and all accrued interest borrowed from a life insurance policy will be deducted from the payments to your beneficiary when you do expire, you can see how this ultimate financial dream has to be a perfect storm of very specific circumstances in order for you to enjoy its advantage.
In most cases, borrowing from a life insurance policy will merely be a tremendously easy way to get quick money for whatever dreams you may have that we can help you with. Unless you have reasons of your own that should remain unspoken, it's usually preferable to start the process of getting that loan with a detailed plan for paying it back already in place.
Please don't hesitate to contact us with any questions you may have on how to use that windfall here in Alaska as well as any questions you might want answered about other means of financing your dream of relocating to Anchorage.