Bill Boersma: On Life Insurance

Question:

Please help me out with the effect of a loan on my policy.  What happens to policy crediting and am I focusing on the cash value or the cash surrender value when looking at COIs (Cost of Insurance).

Answer:

The effect of loans on life insurance policies is a source of common confusion and frustration.  There are potentially multiple effects a policy loan can have but regarding mortality charges we have to focus on the cash value and not the cash surrender value.  The reason is because of how life insurance loans actually work which is different than most people understand based on what agents tell them. For full post, click here…