With so many banks now refusing to give out loans (thanks to the economy), more and more people are looking for other sources to borrow money from, and it may have crossed your mind that you might be able to borrow from your life insurance.

Is this a possibility?

Generally, you can borrow against the cash value that has built up in your life insurance policy. That's the part of your policy cost that's left over once your carrier takes out the expenses to cover the risk of your death and reimburse some of those costs.

Like any loan, you'll have to pay it back eventually, and you'll need to pay interest on the outstanding loan balance. The only real difference or benefit of borrowing from your life insurance policy as opposed to a bank is that the interest rate is generally lower, and there's no approval process. And if you happen to die before you pay your loan back, the balance is deducted from the death benefit, meaning your beneficiaries don't see that money.

For more information on life insurance, or to get a free life insurance quote, visit our website today! We're Paradiso Insurance, an independent insurance agency based in Stafford, Connecticut.