Insurance Backed Loan
Insurance Backed Loan Borrowing money against your medical insurance policy is a type of loan that allows you to cover medical expenses that are covered by your insurance policy. This type of loan is also known as a medical loan or health loan.
When you borrow money against your medical insurance policy, you are essentially using your insurance policy as collateral. The lender will give you a loan based on the value of your insurance policy and the amount of coverage that you have. You can then use the money to pay for medical expenses that otherwise may come later and might take longer time to claim.
While borrowing from your life insurance policy can be a quick and easy way to get cash in hand when you need it, there are a few specifics to know before borrowing. Most importantly, you can only borrow against a permanent life insurance policy, meaning either a whole life insurance or universal life insurance policy.
How a Life Insurance Loan Works
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.