mbrcatz
|
Oh, you don't borrow the money from the bank, you borrow it from the life insurance company that issues the policy.
And you can only borrow up to about 75% of the surrender value. And you realize, right, that the surrender value, is about 10% of how much you've paid in, as long as you've had it, less about $200, right?
So, if you have a $250,000 policy, and so far you've paid in over the years, $10,000 in premium, the surrender value is about $800, and the loan value is about $600. . .. but you pay interest on that $600, to the insurance company. Then if you die, without paying it back, they subtract the $600 from your payout.
It's usually a crappy way to 'save' money. And you can't borrow against the DEATH benefit - only against the overpayment amount - which is what the surrender value is. |
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