Bank Asking for Life Insurance Policy

[Greg Todrank]

I have hit a threshold with my local bank for the amount that I have borrowed.  They are now asking for a life insurance policy of $250k with them as the beneficiary.

1.  Has anyone had any experience with this?

2.  Ideas on a basic / reasonable policy to meet this requirement.

[Zachary Paschke]

Greg, happens all the time. I run a National brokerage where we write policies like this. The bank won’t be the “beneficiary.” You can make a spouse/ kids a beneficiary and then add the bank as a “collateral assignment.” This means the bank gets paid first whatever is left in the loan and the rest is paid to your beneficiary. 

Quote from @Greg Todrank:

I have hit a threshold with my local bank for the amount that I have borrowed.  They are now asking for a life insurance policy of $250k with them as the beneficiary.

1.  Has anyone had any experience with this?

2.  Ideas on a basic / reasonable policy to meet this requirement.