When it comes to borrowing money from a life insurance policy, there are a few options available. Here are some types of life insurance policies that allow you to borrow money:
1. Whole Life Insurance: Whole life insurance policies often have a cash value component that grows over time. You can borrow against this cash value by taking out a policy loan. The loan is secured by the cash value of the policy, and you can use the borrowed funds for any purpose you choose. Keep in mind that the loan will accrue interest, and if you don't repay it, the outstanding balance will be deducted from the death benefit.
2. Universal Life Insurance: Universal life insurance policies also have a cash value component that can be accessed through policy loans. Similar to whole life insurance, the loan is secured by the cash value and accrues interest. If you don't repay the loan, it will be deducted from the death benefit.
3. Variable Life Insurance: Variable life insurance policies allow you to invest a portion of your premiums in various investment options. These policies may also have a cash value component that can be borrowed against. As with other types of policies, the loan will accrue interest and will be deducted from the death benefit if not repaid.
It's important to note that borrowing from a life insurance policy should be done with careful consideration. While it can provide a source of funds in times of need, it can also impact the policy's cash value and death benefit. Additionally, unpaid loans may result in tax consequences. It's always a good idea to consult with a financial advisor or insurance professional before making any decisions regarding borrowing from a life insurance policy.
I hope this information helps! Let me know if you have any further questions.