How To Borrow Against A Life Insurance Policy? 
Its very easy . Call up your life insurance carrier and ask them to walk you through the process . Of course , you should cover a few bases first to make sure that : Its the right decision , and Youre doing it the right way . How do you know its the right decision ? You know it is the right decision if you are absolutely , positively sure your beneficiary can do with less money . This is because the amount of the outstanding loan - plus interest - are deducted from the death benefit . If you take out a significant amount of money , that might short-change your beneficiaries . Then the whole purpose of the product would be defeated . To avoid this problem , reconsider any other sources of a loan . If you go ahead with the loan , reconsider other sources of cash for your beneficiaries to make up the difference . Now : are you doing it the right way ? Have the insurance company run an illustration showing the impact on your policy of taking out cash . Its not just a question of reducing the death benefit . It might also affect the guarantee period of your premium . Lets suppose you bought the policy intending to guarantee the coverage to 100 . Now suppose that taking out the loan would shorten the guarantee to age 85 . Not what you wanted , right ? You need to know this so you can design a strategy for paying back the cash . You might want to pay it back sooner than you had intended , so as to restore the original value of the of the product . These are some of the important bases to cover when you think about taking money out of your life insurance policy . 