How much can I borrow from my Life Insurance Policy?


A life insurance policy is an important part of building a financially secure future, since paying the premiums usually means you will have an asset to help pay for your funeral expenses, pay off debts, provide for your family, and more. But how much can I borrow from my Life Insurance Policy?

This guide covers how you calculate the loan amount with different insurance terms and what to do with it when you get it.

Please keep in mind that the amount of a cash surrender value is not necessarily the amount you can borrow from your policy. The amount you can borrow varies based on your policy’s cash surrender value (CSV) and if it’s a new or existing policy.

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how much can i borrow from my life insurance policy
How much can I borrow from my Life Insurance Policy?

Why Do I Need Life Insurance?

In most cases, life insurance isn’t needed to provide for immediate financial help, but it makes sense to carry a policy today in case you need an asset to cover other expenses later down the line.

For example, if you have a life insurance policy for $100,000 and you pass away, the insurance company will provide your beneficiaries with that benefit.

Life Insurance can help pay for :

  1. Funeral costs: Paying for your funeral costs ensures that your loved ones won’t have to worry about taking care of this last financial obligation for you. It can also prevent the chance of scammers from showing up at your loved one’s door pretending to be an “emissary.
  2. Pay off debt: Life insurance can help pay debts, such as credit card bills or car loans, to free up cash for your family.
  3. Estate taxes: Federal estate taxes kick in at $5 million and it’s higher in some states. If you have a large estate that could be subject to these taxes, life insurance may be a good way to help offset the expense of taxes so some of your money goes directly to your family instead of into the government’s coffers.

How much loan can I get on my insurance policy?

If you’re borrowing money to purchase a home, pay for college expenses, or cover any other cost, you might need to apply for a loan. As part of the process of getting approved for a loan, you’ll be asked how much money is available in your bank account. You’ll also be asked how much your car insurance policy is worth if it’s an asset on the loan application.

What is surrender benefit?

If you are just getting started in the investment world, one of the most important decisions that you will make is what type of account to open. One decision to make when deciding how to invest is whether or not to use an IRA. The IRA has many benefits, but one of its biggest perks is the ability for investors who are age 59.5 or older to withdraw any profits from an account without penalty.

How do you calculate surrender value?

Surrender values are the price that a poker player pays to voluntarily leave the game with chips in their hand. This can happen for a wide variety of reasons: fatigue, bad cards, medical issues, or just plain losing your will to continue playing. If you plan on playing competitive tournaments and big cash games against expert opponents or professionals who play a lot more than you do, then being able to calculate surrender value is important so that you don’t get into a situation where it’s not in your interest to call.


Hopefully, you found our article to be informative on how to borrow money from a life insurance policy. Life insurance always offers peace of mind, and knowing that you are able to borrow money from it is a great option to have.

This is a great place to start if you are interested in learning more about how to borrow money from your life insurance policy. If you have any questions, please don’t hesitate to reach out to us. Thank you for reading, we would love to hear from you!


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