Definition
A type of whole life insurance policy you borrow from, similar to taking a loan from yourself. It can provide a cash reserve but comes with fees and rules.
What to consider
- Keep a close eye on your account to avoid costly fees.
- Set up alerts so you’re notified before you overspend.
- Explore options like linked savings accounts for extra protection.
Real world scenarios
- Catherine borrows against her policy’s cash value to fund a small home renovation, paying herself back with low interest.
- Mike sees his policy’s cash value grow steadily, providing an emergency loan option without relying on external lenders.
- Stacy tracks her policy’s ongoing performance to ensure she can still access funds as needed without compromising coverage.
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