Another possible source of loans is a life insurance policy.When you study insurance,you will learn that some types of life insurance have cashes or loan value.Anyone who owns this type of insurance may borrow up to the number of its cash value.
Life insurance loans are easy to obtain.The rate charged is less than that for almost any other type of loan availavble for consumers.This is because the lender takes no risk.Also,borrowers may take as long as they want to repay their loans.Although that may seem like an advantage,it can also be a disadvantage.When a borrower is not required to repay a loan within a certain time,it is easy to let it run on and on.This increases the dollar costs of a loan because interest must be paid for as long as the loan continues.Also,the amount the insurance company will pay for the case of death is reduced by the amount of the loan.For example ,suppose that someone with $10,000 of insurance borrows $2,000 and dies leaving the loan unpaid.The insurance company would pay only $8,000 to the person entitled to receive the money.Of course,if the $2,000 loan had been obtained from another source,it would still have to be paid. | 
发表于 2006-5-6 12:21
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