Not exact matches
With the safe bucket covered and generating passive, tax advantaged income, they then have the freedom to entertain opportunities such as real estate, business start ups, private lending and other lucrative opportunities by borrowing money
at favorable rates, often from the mutual insurance companies general account using their policy cash value as
collateral, or shopping the
rate to other financial institutions to see who is most competitive.
However, this «non-forfeiture value» of a life insurance policy has an important secondary benefit as well — it gives an insurance company the means to provide policyowners a personal loan
at favorable interest
rates, because the cash value provides
collateral for the loan.
Fortunately, life insurance companies will make personal loans
at rather
favorable interest
rates, primarily because the insurance company directly controls the life insurance cash value serving as
collateral for the loan.
One of the virtues of cash value life insurance is that insurance companies are willing to make loans against the policy
at relatively
favorable interest
rates, because the insurance company knows that it can always foreclose on the policy (i.e., force its surrender) as
collateral to repay the loan.