The Life Insurance Loan
Borrow up to 50% of your life insurance policy’s face value with a life insurance loan.
With a life insurance loan, you borrow against your existing life insurance policy using the policy as the collateral for repayment of the loan.
Borrowing against your policy provides a lump sum cash payment today and a death benefit in the future. The amount of a life insurance loan offer is based primarily on the insured’s life expectancy and the cost of future policy premiums. Once the loan is completed, you are released from any further obligations and can use the tax free proceeds however you please.
With a life insurance loan, you can receive up to 50% of the policy’s face value with no future premium expenses. A life insurance loan is typically the best option for clients who need immediate cash, but would also like to preserve some death benefit to pass on to their heirs.
Benefits of a Life Insurance Loan
The life insurance loan has become a popular way for people battling cancer and other serious illness to obtain immediate funds to pay for medical bills, alternative treatment, housing costs, family gifts and other expenses. Since there are no restrictions on how the funds can be used, a life insurance loan can be a smart financial option for people searching for financial peace of mind. And since it is a loan, there is no federal taxation of the proceeds. It’s your money. Why not use it now?
Use your life insurance loan proceeds however you please:
Who Qualifies for a Life Insurance Loan?
Qualifying for a life insurance loan is based on a few basic factors, namely, your health history, policy amount and type and future premium costs:
You have been diagnosed with a serious, life-threatening or other terminal illness.
In order to qualify for a life insurance loan, you must have been diagnosed with a serious, life-threatening or other terminal illness. Examples of qualifying medical conditions include: late-stage cancer (Stage III or IV), advanced-stage dementia, ALS, congestive heart failure, late-stage liver disease, renal failure, and advanced COPD. For a list of other qualifying medical conditions, please click here.
If you do not have a serious or terminal illness and are over the age of 70, you may nonetheless qualify for one of our life settlement programs for seniors. To learn more about these programs, please visit our companion website.
The face amount of your policy should be at least $75,000.
To qualify for a life insurance loan, your policy must have a current death benefit of at least $75,000.
Your policy type must be eligible.
Most life insurance policy types are eligible for a life insurance loan, including, Universal Life, Whole Life, Flexible Premium Adjustable Life, Group Life, Indexed Life, as well as governmental benefit policies issued by FEGLI, VGLI and SGLI. Term Life policies usually qualify for a life insurance loan as long as there is sufficient time left on the term, or the policy is convertible to a permanent life insurance policy.
“I received more money from our policy than originally offered by a “direct funder” thanks to Rick Johnson and BRAVEPORT.”
How it Works
The life insurance loan process starts with our initial free consultation and ends with payment to you. There are no credit checks or medical exams required. Your eligibility is determined solely on whether your medical profile and policy qualify. A life insurance loan can typically be completed within 4-6 weeks of completing our underwriting process. Here’s a summary of how the life insurance loan process works:
1. Free consultation and no-obligation policy review.
After you contact us, we will get in touch to pre-qualify you for a life insurance loan. We will ask you some basic questions about your health and the policy and will discuss how much you may be able to receive from a life insurance loan. The initial consultation usually takes no more than 10 minutes.
2. Fill out our client questionnaire.
If you are qualified and decide to move forward, we will provide you with a short client questionnaire (via your choice of email, fax or mail) to help us gather information about your health history and the life insurance policy. The questionnaire usually takes about 15 minutes to complete.
3. Policy and medical underwriting begins.
Once your return the completed client questionnaire, we will obtain necessary records directly from your medical providers and your life insurance company. After reviewing the records, we will complete our underwriting and start the competitive bidding process with our network of life insurance lenders.
4. The competitive bidding process.
One of the biggest advantages to working with a broker like us is our competitive bidding process. Unlike “direct funders” and lenders who are motivated to offer you the lowest amount they think you will take, we will negotiate the highest offer through our network of funding sources. During the bidding process, we will inform you when new offers are received and update you about our progress.
5. Review offers and decide.
After you review all the life insurance loan offers, you will decide if you want to move forward. If the offer isn’t high enough for you, or you choose not to proceed, you are under no obligation and can walk away at any time. If you decide to accept an offer, we will immediately begin the closing process and handle all the paperwork for you.
6. The closing process.
Once you accept an offer, the lender will prepare the loan agreement documents. We will help you complete the contracts and work with you to finalize the transaction. After the buyer reviews and accepts the contracts, they will record their interest in the policy with the insurance company. Once the insurance company verifies the process has been completed, the lender will send the loan proceeds directly to you via wire transfer or certified check.
7. After the transaction is completed.
Once the loan process is completed, you are immediately released from any further premium payments and are free to use your funds however you choose. The lender will continue to make premium payments on the policy to the insurance company and will collect the loan balance directly from the insurance company upon the passing of the insured person.