Catch this Special Interview with Alex. Alex contacted our office for some policy reviews after his agent told him “let policy loans pay your premiums.” This started in the 90’s. 20+ years later results are plaintive.
These were (and still are) good life insurance policies, but the funding strategy backfired. Policy loans can enable you to take great financial opportunities without giving up guaranteed growth + dividends on your money, and like any good strategy this can be taken too far.
Good rule of thumb for Policy Loans = Make sure you’re always making or saving more money than the interest when you take a policy loan.
Can you use a policy loan to pay a premium if you’re in a cash flow crunch? Of course, just don’t make this your long-term habit. DO make sure you’re always aware of the interest on any and all policy loans that you take.
Plan to review your strategy regularly – about 1x year is a good idea. Contact Life Benefits for a complimentary policy review.