Does anyone know anything about this?How much you can borrow? How it is paid back? What is the interest rate? Does it go off of your credit score?

This does not work with term insurance or the insurance u get from most employers. If u have an older cash value insurance policy, the interest rate is nominal, sometimes under 4%. If u do not make payments the payment is subtracted from the death benefit.

Whether u have a new or old policy it is governed by the terms outlined in the policy. Get a copy (if u lost it call the insurance company.) Skim it, looking for the section on policy loans.

The most u can borrow is the cash value of the policy multiplied by a fraction spelled out in the policy. You pay it back the same way u pay premiums. If u do not pay it back it accumulates with interest & is used to offset the death benefit.

If the policy lapses, u do not owe anything & there will be not credit report that will be scored against you.

You can borrow against you insurance, but only if it is a whole life insurance policy. It also must have some cash value in the policy. You must contact your insurer about the details (interest rate) as it depends on the company. Most companies let you pay it back or keep the loan permanently.

l will answer each of ur questions seperately:

1) u can borrow money against a whole life policy, but not a term policy.

2) u can borrow up to amount of the cash value in the policy.

3) u pay it back however u want to pay it back. You can make regular payments, u can use the dividends you're receiving or u can just let the interest accumulate over time & that amount owing will be subtracted from the benefit amount paid out. Basically, if u do not pay it back, they get their money in the end anyways.

4) the interest rate is dependent on where u live & the company. In Canada, most of the rates l deal with r around the 4-7% mark.

5) A policy loan has absolutely nothing to do with ur credit score. You more borrowing ur own money than anything. You credit score does not effect ur rates or anything & the actual loan does not effect ur credit score or anything. There is really no application process or anything. You just borrow money out of it.

It does NOT go off ur credit score, because u can only borrow about 75% of the overpayment you've already paid in. You're borrowing ur OWN money - the ''cash savings'' element.

See, if ur policy is $1000 a year, then about $100 a year goes into the cash savings, & u can borrow 3/4 of that. You'd pay the interest on ur own money, to the insurance company for them to keep forever (around 8%), & if u die before paying it back, they subtract the loan, interest, & fees from the payout amount.

So. You give me $1000. l lend u half of it back, u pay me interest on ur money. Sound like a good deal? No, l did not think so. But that is how ''cash value'' life insurance works. No credit score needed, because you're only borrowing ur OWN money.