It only works if you need the life insurance, too. There is a cost to pay for the death benefit. There is a built in annual cost to pay for maintaining the policy. And obviously, there is the initial cost to pay the commission for the origination.

You'd be better just investing in Muni's or something else tax deferred with a small penalty for early withdrawal on the chance that you don't really need the life insurance.

If you need both (life insurance and cash value), shop about 4 different options. Ask a lot of questions (fees involved to process your request for funds? Surrender charges against your funds? Tax ramifications for your cpa if you surrender the policy with an outstanding loan)

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Posted by IglooTiger

Member since May 2018

33 posts

Posted on 6/5/18 at 10:17 pm to meansonny

Thanks, sir. I get the part about cost of death benefit... and I’m all ears to another tool that can provide the same “business cash flow control” benefits (unstructured loan against a compounding investment, repayment flexibility) that does not have death benefit implications.

I just haven’t seen it. Tell me where it is and then I can compare.

So far the only competitor is the ancient secured by deposit CD, Savings which puts the bank in control of both use of money and repayment terms.

I’m sick of the banks.

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Posted by IglooTiger

Member since May 2018

33 posts

Posted on 6/5/18 at 10:29 pm to meansonny

quote:
There is a cost to pay for the death benefit.

This is basically the cost of term insurance, correct?

Good point to bring up as it’s not only interest expense you are evaluating but the cost of death benefit insurance. Term is cheap depending on the person. Hopefully no issue there, but will definitely get some term quotes to evaluate the monthly
expense I’m giving up there in lieu.

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Posted by player711