Is Loan Against Life Insurance a Good Idea?

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Is Loan Against Life Insurance a Good Idea?

• Life Insurance

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Person needs huge amount of money when the
unexpected happens and borrowing money from life
insurance in India is a really good
idea. Policyholder can get a loan from his
traditional life insurance policy only in case
insured have paid the premium amount for the
first three years. It helps policyholder to meet
his requirements during unplanned life stages
without affecting the policy benefits they have
purchased. The loan amount is equal to around
90 of the surrender value of the policy.
Contractually, policyholder is guaranteed to be
the first in line to get access to his cash
value.
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Nowadays, insurers offer loans at minimum rates
in case of loan against insurance policy. It is
advisable to take a loan on the life insurance in
India if policyholder is in emergency, since bank
loans are available at slightly higher interest
rates. But, you should know that you are paying
interest to use your own money. Therefore,
insured person can instead consider surrendering
the policy in case of long-term need. But, do not
opt for this loan if you are not having a
financial emergency. Try to know the actual cash
value of the policy and then contact your
insurance service provider. Determine about the
interest rate for an insurance loan. Remember
to ask your insurer about any processing fees
associated with the insurance loan.
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Prepare a strategy for paying back the policy
loan even if life insurance companies in India
arent aggressive about collecting on insurance
loans. Insurer will charge interest rate on the
loan which is based on the company holding the
money as well as on the gaining life insurance
interest. In case policyholder dies before
paying the entire loan back, then insurer will
pay out the policy face value, minus the loan
amount and any accrued interest. Read life
insurance reviews and then perform life insurance
comparison to select the best plan because
choosing the right plan is very much important to
avail benefits in the future. source
http//blog.policyboss.com/insurance-policy/loan-l
ife-insurance-good-idea/
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Thank You.?