Using Life insurance policies to flip houses

Member since 2024 · 1 post · 2 votes

I have zero knowledge and I’m interested in learning. Currently have life insurance policies. I was told that you could use your life insurance policies to borrow money for renovating property. If there is any information available please advise. Thank you in advance!

2 Reply

59 views

Most Popular Reply

Mike S.

Investor · Broward County, FL · Member since 2018 · 1k+ posts · 938 votes

Only some type of life insurance policies offer loans. These policies are usually permanent life insurance like Whole or Universal Life Insurance policies. Also, they need to have been issued with the goal of cash value accumulation as regular policies are usually crafted for the most death benefit with the lowest premium cost, limiting the cash value.

All the information of your current policies were given to you in the initial contract. You can also consult with your agent to tell you if you can borrow from your policy.

If you want to get a policy that is designed properly for high cash value accumulation you need to find an agent who is knowledgeable and willing to sell them as the agent is getting a lower commission on them than regular policies.

3 Reply

See this reply in the discussion

5 Replies

Jump to latestLatest

Sort by

Mike S.
Investor · Broward County, FL · Member since 2018 · 1k+ posts · 938 votes
2y
Only some type of life insurance policies offer loans. These policies are usually permanent life insurance like Whole or Universal Life Insurance policies. Also, they need to have been issued with the goal of cash value accumulation as regular policies are usually crafted for the most death benefit with the lowest premium cost, limiting the cash value.
All the information of your current policies were given to you in the initial contract. You can also consult with your agent to tell you if you can borrow from your policy.
If you want to get a policy that is designed properly for high cash value accumulation you need to find an agent who is knowledgeable and willing to sell them as the agent is getting a lower commission on them than regular policies.
3 Reply
Owen RosenBusiness Member
Professional · Clinton Township, MI · Member since 2015 · 682 posts · 259 votes
2y
Jerry-

Some of what Mike wrote is valid in terms of starting life insurance policies with the goal of cash accumulation and then using that cash for investments but it sounds like you're asking about policies you already have. I'd be happy to review those for you.
If you purchased permanent life insurance you should get an annual statement with current values. You can also often check online or contact your agent if you have one. Otherwise, contact the insurance company.
In terms of starting new policies I strongly agree with contacting a knowledgeable agent.
Royal Oath Insurance Group4.9203 Reviews
Website View Page
3 Reply
Thomas RutkowskiPro Member
Financial Advisor · Boynton Beach, FL · Member since 2015 · 834 posts · 798 votes
2y
If you have cash value, you can absolutely borrow against it (policy loan). This is true whether the policy was designed for maximum cash value or not. You just need to call the customer support number and follow the voice prompts to get to the person who handles policy loans.
1. If you have a choice of loan options, such as fixed or variable, take the variable option.
2. All policy loans are loans AGAINST the cash value. BUT, some companies will still pay dividends on the cash value securing the loan and some won't. If your company doesn't pay dividends on the cash value, you may want to rethink this approach since getting a loan would hurt the growth of the cash value.
2 Reply
Matt Ruttenberg
Specialist · Grand Rapids, MI · Member since 2020 · 116 posts · 80 votes
2y
Quote from @Jerry Bailey:

I have zero knowledge and I’m interested in learning. Currently have life insurance policies. I was told that you could use your life insurance policies to borrow money for renovating property. If there is any information available please advise. Thank you in advance!

You can absolutely take loans against them. However I would reach out to the carrier to see how they could affect the policy since we don't know the specifics of your policy. My guess is it's not an completely optimized policy for this strategy, but it might be ok.
Feel free to reach out with any questions at all regarding how all this works.
1 Reply
Jay King
Member since 2024 · 26 posts · 6 votes
2y
A great book on the subject "What would the Rockefellers do?" A wonderful illustration on the velocity of money.
1 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.