- 1). Review your life insurance documents. In order to take a loan from your life insurance, it must be a whole or universal life product. Information about borrowing against your policy may be listed within; otherwise search for a customer service number.
- 2). Calculate the approximate cash value of the policy. Be aware that the cash value is not the same as the death benefit; it is simply the amount of money you have paid into the policy. If it is a relatively new policy, there will not be a large amount of cash available for borrowing. The cash value is probably listed on your last annual statement from the insurance company. Set a limit on the amount you will borrow based on this cash value, keeping in mind that if you borrow too much, the policy will collapse. If the annual statement is several months old, add any payments you have made since the statement to the stated cash value.
- 3). Research how your loan could affect your death benefit. In most cases, if you die before the loan is repaid, the balance that you owe, with interest, is deducted from the death benefit. It is in your best interest to repay the loan as quickly as possible when it affects your death benefit and your policy's earnings.
- 4). Contact your insurance company. The contact information should appear on your bill. In most cases, it is easiest to reach a customer service representative in the morning. Provide your policy's account or identification number and ask about drawing against the insurance policy.
- 5). Confirm the policy's cash value and inquire about the loan guidelines and interest rates. Provided the answers are acceptable, proceed by telling the customer service agent how much you wish to borrow from the policy.
- 6). Ask when a check should be expected. Take notes regarding any information you are given. Write down the date and time of your call, as well as the name of the agent and his identification number or phone extension.
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