How Borrowing Against Your Whole Life Insurance Policy is a Financial tool for Canadians.

When it comes to managing finances, Canadians seek security and flexibility.

In Canada, Whole Life Insurance Policies are a reliable safety net for the future, but it also harbours an often-overlooked benefit:

The ability to borrow against its cash value.

As financial advisors, we will be the first to tell you that insurance = security.

But there’s an insurance policy that has an added benefit, beyond cash compensation for your beneficiary.

It’s essentially a forced savings plan that allows you to borrow money in case you need it in the future.

What does "borrowing against your Whole Life Insurance" mean?

We’ll explain!

But first - at CC&Associates, we can help guide you on the best option. If you want to talk about anything related to finances, please book a 15-minute Q&A meeting with us here.

Now, let’s dig in.

Borrowing against your Whole Life Insurance, to put it simply is taking money from your policy and using it as a loan.

The perks?

• It's usually a smooth process with minimal paperwork and no need for credit checks.

• Your policy's cash value acts as collateral, making it a hassle-free borrowing option.

• Lower interest rates on these policy loans, compared to standard bank loans or credit cards

• Every policy is different, therefore repayment structure will be determined based on what policy you purchase.

Now, what could you do with this borrowed money?

• unexpected expenses,

• investing in education,

• supplementing retirement,

• or seizing a great opportunity

There are important considerations to keep in mind:

1. Borrowing against your Whole Life Insurance policy affects its cash value and death benefit.

2. Failing to repay the loan might reduce the death benefit that your beneficiaries would receive when you're no longer around.

Hence, thoughtful planning and consultation are keys before diving into this borrowing option.

We highly recommend reaching out for advice before borrowing from the policy.

At CC&Associates, we can shed light on the implications of borrowing against your Whole Life Insurance policy.

Having this conversation will ensure that your decision aligns with your broader financial objectives without compromising the long-term security you've set in place, you can book a 15-minute Q&A meeting with us here.

Thanks for reading,

CC& Associates