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Foreign Policy Analysis
How to Take a Whole Life Policy Loan and Pay It Back

How to Take a Whole Life Policy Loan and Pay It Back

– All right, I wanna walk you through the process of taking a whole
life insurance policy loan and repaying that loan. Now, I want you to comment
in the comment box below. If you have a whole life insurance policy and you have taken a loan before, please type yes, because I’d love to know
if I’m talking somebody who already has this experience. And if you have never taken a policy loan but you are a whole life
insurance policy holder, then go ahead and type no,
I’ve never taken a policy loan in the box below. Then, if you are just
interested in the topic of privatized banking
and whole life insurance, and you wanna know what
this whole thing is about, taking policy loans, please type I’m interested
in finding out more in the comment box below. And the reason is that
I’d really like to know who I’m talking to and what is most important in your mind. Now, the idea of taking a
policy loan in the first place might sound a little interesting to you if you’re not familiar
with privatized banking. So I’m gonna rewind and tell you just a little bit about why we’re addressing this concept and idea in the first place. With privatized banking, you have a whole life insurance policy. You’re funding with premium dollars, those dollars are going into the policy and they’re building up cash value. Now, that cash value is
guaranteed to be accessible to you contractually within
the policy guarantees. Now what that means is
that you have access to use that cash value. Now, instead of taking the
cash value out of the policy, instead, you’re actually
borrowing against it. Meaning that your money
stays inside the policy and continues to grow with
interest and dividends while you collateralize that cash value. So here’s a very clear distinction. You’re not taking your money out, you’re borrowing against it. That means your money
can grow and compound and you’re using other
people’s money instead. So now, how do you actually
borrow against that money? It’s through a policy loan. What you’re gonna do is
you’re going to request from the life insurance
company a policy loan. And to do this, there’s some paperwork that you need to fill out. You usually have this directed straight to your bank account, so there’s EFT form that
usually involved as well. Or you can have them send you a check, but it’s always better to
have it direct deposited straight into your account. Now, you can usually do
this by using a login and login information and then making sure that you fill out all the paperwork appropriately. However, we highly recommend
going through your advisor. If you contact your advisor, let them know that you
wanna take a policy loan. They will make sure you
get the correct forms, correct paperwork, and that they give that to
the life insurance company, that makes it way easier for you. This also then can initiate a discussion where you’re talking with your advisor about how and when you
wanna repay that loan. Because here’s the thing. We wanna make sure that
anytime you take a policy loan, you have a plan in place to repay it. Now, that’s your plan, it’s not the life
insurance company’s plan, it needs to be something
that you agree to, what your cashflow
situation will look like and how quickly you can make payments to reduce that loan. Now, as you have an outstanding loan, here’s what it looks like to you. Your cash value remains fully intact. The life insurance then
provides you the capital and they put a lien
against your cash value, for the portion of the loan. So say you had a $300,000
cash value inside your policy, you’re taking $100,000 policy loan, that means they’re gonna
collateralize $100,000 of that full cash value. And then that 100,000
is no longer available to be reborrowed against
until you repay it. The other 200,000 though,
is still available to you. So, what that means then, is with the life insurance company loan, you will be paying interest on that loan. And the interest is going to
the life insurance company not directly to you. You’re repaying that loan at interest. Now, you can repay on your terms. That means you can repay in five years, five months, 15 years, or you can repay all at once. Now, it will continue to accrue interest while the loan is outstanding. And so, the thing you do wanna be aware of and cognizant of is that if
you had a maximum policy loan, or you borrowed almost
all of your cash value, or against almost all of your cash value, you would wanna make sure that that interest wasn’t growing faster than the dividends and interest we’re adding back to your cash value. Because then your cash value
could actually become depleted and end up in a situation
where your policy folds. We don’t wanna do that. But what we do wanna
have is a repayment plan so that we know how much
we plan to contribute to paying this loan back, either monthly or annually. Now again, what’s really awesome is that you can make changes. So if you had a delay in
your repayment schedule, or you had an acceleration, you wanted to repay more quickly, you would also be able
to make those changes. So just a couple things for you to become familiarized with
the use of your policy. Because a whole life insurance policy, if you’re using it for privatized banking, is not a set it and forget it
on the shelf type of product. It’s really meant to be used and driven. So like if you were driving a car, you’d wanna know how to
operate that vehicle. You wanna know how to operate your whole life insurance policy so that it can be this living, breathing, moving thing for you. And yes, it has the cash value component, but you’re using that cash value. And again, you can use that for things like investing in a rental
property that cash flows. And then you can have
that investment property producing cash flow and using that to repay your policy loan. Anytime you use a policy loan for an asset that produces cash flow, you’re in a double win situation. Because then, you are increasing your cash flow with this opportunity that you have the ability
to repay that loan outside of your own personal cash flow. So if this has been helpful to you, I would love to know. What other questions you have about life insurance policy loans and how can we make sure
that you are on the path to become a knowledgeable, intelligent, and confident owner and user of privatized banking? (upbeat music)

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