Borrowing Benefits from Cash Value
In addition to being an estate planning solution, cash value life insurance offers unique borrowing opportunities. If you have made premium payments for a permanent life insurance policy or policies over the several years, considerable policy cash value may result and offer an accessible asset to secure loans. Life insurance companies and certain banks provide such loans. Most policy owners are generally aware of the concept of borrowing cash from a policy, but there are important options and nuances to understand.
Generational Rate Decline
Currently, interest rates for 10-year and 30-year treasury bonds are approximately 1.62% and 2.38%, respectively, just over half the levels of a decade ago. In fact, we’ve realized a generational decline in long treasury interest rates which were between 6% and 8% in the 1990s and even higher in the 1980s. When treasury rates decline, rates on most bonds with similar maturities decline as well, meaning consumers and companies alike have enjoyed substantial savings in borrowing costs for decades. However, all has not been well in certain corners.