The IBC community is aware of two or three banks that will lend against the cash value of a life insurance policy. We'd like to know of any other banks/CUs that will accept this as collateral for a LOC. There are, however, a lot of banks/CUs out there.
Does this ring a bell for anyone?
Unlike a bank loan or credit card, policy loans do not affect your credit and there is no approval process or credit check since you are essentially borrowing from yourself. When borrowing on your policy, no explanation is required about how you plan to use the money, so it can be used for anything from bills to vacation expenses to a financial emergency. Why go to a bank?
That is all correct, and a great benefit of policy loans.
Some banks accept them as collateral and offer loans or lines of credit against them at lower interest rates than the insurance company offers.
Which makes more sense at a given moment depends on your circumstances and personal risk tolerance.