A reserve for the big emergencies.
A job loss, a medical bill, a new roof. A cash value life insurance policy gives you a reserve you can borrow against when something big comes up, at any age and for any reason, with no credit check. The insurer charges interest, paid to the insurer, and a death benefit stays in place for your family.
Big emergencies tend to arrive at the worst time.
When something large hits, the usual ways to cover it each come with a cost. Investments may have to be sold in a down market. Retirement money taken out early is often taxed and can carry a penalty, though some accounts allow loans or penalty-free access. A balance carried on a credit card builds interest fast.
A policy built as an emergency reserve gives you another option: borrow against your cash value with a loan request to the insurer. The insurer makes the loan and charges interest, paid to the insurer at the rate the contract sets, and you repay on your own schedule. Policy loans usually take a few business days, so the policy works alongside the cash you keep on hand for same-day needs.
The usual ways to cover a big emergency
- Selling investments, possibly when prices are down
- Traditional 401(k) or IRA withdrawals before 59½: generally income tax, and often a 10% penalty (Roth IRA contributions can come out tax- and penalty-free)
- Carrying a credit card balance at a high interest rate
- A new loan application when your income may have just changed
A reserve you can reach when it counts.
The mechanics are the same whichever policy you choose.
Borrow at any age
Send the insurer a loan request, up to the loan value the contract sets. There’s no credit check and no hardship paperwork, and you don’t have to say what the money is for. On a policy that isn’t a modified endowment contract (MEC), there’s no age-59½ rule, and we design the funding to keep it from becoming one.
Your family stays covered
Borrowing doesn’t cancel the coverage. While the policy stays in force, the death benefit is still there for your family, reduced by any loan balance outstanding.
Repay when life settles
There’s no required repayment schedule, so you can repay once your income is back on track. Repaying restores what you can borrow next time. Unpaid loans and interest reduce the death benefit.
Two ways to build the reserve.
Both policies build cash value you can borrow against. They grow differently, and that matters for money you want to be there when you need it.
| Participating whole life | Indexed Universal Life | |
|---|---|---|
| Premium | Fixed; due every year of the premium-paying period | Flexible within limits; paying too little can cause a lapse |
| Cash value growth | Guaranteed schedule, plus dividends (not guaranteed) | Index credits within a cap and a 0% floor, minus policy charges; cash value can decline |
| In a down market | The guaranteed schedule doesn’t depend on an index; dividends are set by the insurer each year | Index credits never go below 0%, but policy charges still come out, so cash value can decline in a 0% year |
| Suits someone who | Wants predictable values in the reserve | Wants flexible funding and more upside potential, with more year-to-year variation |
| Framework | Banking Action Plan | Designed in your strategy session |
Dividends aren’t guaranteed, and the insurer sets them each year, but many participating carriers have paid dividends every year for decades. IUL caps (upper limits on index credits) and other non-guaranteed elements can change within contract limits. See the full comparison.
Your reserve, in three steps.
Fund the policy
Choose a premium you can keep up every year and let cash value build, with life insurance in place from day one.
Borrow if something big hits
Request a policy loan for the job loss, the medical bill, or the roof. Funds usually arrive within a few business days.
Repay and rebuild
Repay on your schedule once things settle, and the reserve is ready for next time.
Questions we hear about emergency reserves.
How fast can I get the money?
Insurers usually fund a policy loan within a few business days of the request. For same-day needs, the cash you keep on hand covers the first few days.
Do I have to explain why I need it?
No. A policy loan is a request to the insurer, up to the loan value the contract sets. There’s no credit check, no approval process, and no hardship rule.
What if I can’t repay for a while?
There’s no required repayment schedule. Unpaid interest is added to the loan, and any balance outstanding is subtracted from the death benefit. If the loan grows larger than the cash value, the policy can lapse, and the gain can become taxable. We help you keep the loan balance in a range the policy can carry.
What if I never have an emergency?
The cash value stays in the policy, and the life insurance stays in place while the policy is in force. You can borrow against it later for something else, like a big purchase or an opportunity.