Advance Payment Contract

The value of your permanent life insurance policy may be very high if you keep your policy for a long time. It's a funds that can be used as we have just seen, to maintain your police force if you fail to pay a premium or you can also use it to get a loan.

You can borrow an amount equivalent to the redemption value of your policy, or near this value, according to the provisions included in your contract.

Then you can pay it back on one shot or more. At your death, the unpaid balance, increased by the interest is deducted from the insured capital. You must pay interest because, when calculating the premium, the insurer considered that it would invest the funds that you borrow and loosing the interest on his side.

Advance payment contract is even more practical: because there is no creditworthiness investigation and the usual disadvantages of it. Simply contact your agent or your life insurance company closest branch. (If you have designated an irrevocable beneficiary, you will need to get his signature.) The advance may be completely or partially taxable. Learn about the tax implications from your insurer.