A life insurance policy with accumulated cash value can be used as a form of leverage when applying for loans. Your life insurance policy, typically a whole-life type policy, has gained a cash value over the years, and when you choose to borrow money based on this it is known as an assignment. In many cases you can get an assignment on the cash value of your life insurance policy fairly easily. This type of loan is generally tax-free because it is considered to be a debt rather than a taxable distribution, but check with your insurer to be certain regarding the taxation status of your particular assignment.
1. Compile your personal copy of your insurance policy and your most recent statements reflecting the current cash value of the policy.
2. Contact your insurer. The contact information for your insurance policy provider will be furnished on your insurance policy.
3. Inform a representative from your insurance company that you want to take an assignment on the current cash value of your life insurance policy. Be sure to tell the insurance representative whether you wish to borrow the full value for which you are eligible or just a portion of this value. Your insurer will draw up a legal contract, which you must then sign, that will grant you the loan and certify that you promise to repay this loan.
4. Obtain and sign the contract for the assignment. Your insurer may require you to visit its offices to do so. Carefully read every portion of the contract for correct amounts and personal information prior to signing.
5. Return the contract to the insurer. Depending on its policies, you may receive a check for your assignment value within days -- or it could take weeks.
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