1) No Required Repayment Schedule – if things get tight, you can skip payments back to your life insurance policy without lapsing your insurance coverage; try that with your home equity loan, and you could lose your house!
2) Ease of Accessing Money – with life insurance, you cannot be turned down! There is no application paperwork, no credit check, no income documentation. You simply fill out 2 sheets of paper with your agent, and you have your money within a week or two.
3) Amount of Equity – with a home equity loan, you are typically capped at 75-80% loan to value, based on your lender (and many times less). With life insurance, you can access 90-100% of your cash value, depending on the carrier.
4) Uninterrupted Compound Interest – Did you know that when you borrow against your life insurance policy, the money does not actually “come out” of the policy? The insurance company makes an independent loan using your cash value as collateral. Your cash remains in your policy, continuing to grow and compound.
5) Interest Rates: The interest rate of a life insurance policy loan is comparable, and in many cases, can be much less.
P.S. If you haven’t checked it out yet, please stop by my mini online seminar How Retirees and Pre-Retirees Can Potentially Avoid Going Broke While Keeping Their Nest-Egg Secure! Tons of great information and bonus is it is 100% COMPLIMENTARY!
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