Bank loans secured by the cash value

[WMSG]

I missed the part of your email that helped by listing the bank names that offer this as a service

I didn't list any as the OP was asking for banks that lend against IUL.

Regardless, I am always willing to help -- the most recent list I have is:

• Valley (National) Bank
• Investors (Savings) Bank
• Bancorp (I had dealings with them as recent as two weeks ago)
• Dollar Bank
• Fidelity Bank
• Coastal States Bank
• US Bank
• Kensington Financial Associates (this one I do not know anything about)
• Columbia (Savings) Bank
• Citizens National

All of the above have formal programs -- for whole life insurance.

All the best!

 

[WMSG]

In addition, in the UL marketplace -- while plenty of banks will loan money for "premium" (via premium finance), try getting them to loan money against the cash inside a UL policy, and you'll find it's a very different discussion...apples and bowling balls.

I've seen the large brokerage/investment firms do it for a "private client" (a real private client) and it was usually a very substantial loan. One case was a loan, the other was a line of credit (which wasn't renewed after the two year term). I've also seen a couple of trust companies do it for a big client, and as I said, that was on a "one-off" basis.

 

[Allen Trent]

I didn't list any as the OP was asking for banks that lend against IUL.

Regardless, I am always willing to help -- the most recent list I have is:

• Valley (National) Bank
• Investors (Savings) Bank
• Bancorp (I had dealings with them as recent as two weeks ago)
• Dollar Bank
• Fidelity Bank
• Coastal States Bank
• US Bank
• Kensington Financial Associates (this one I do not know anything about)
• Columbia (Savings) Bank
• Citizens National

All of the above have formal programs -- for whole life insurance.

All the best!

Excellent. Good to know.

 

[WMSG]

I got a call from a client/friend yesterday...he is two WL policies that he took cash value line of credit loans on (about 50% of the cash value). He also has two UL policies -- which have been properly funded from day one -- that he wishes to take out a cash value loan on, although he doesn't want to borrow against/from the policy. The bank that did the WL loans, while they have a formal program, will not do UL.

The client has an excellent relationship (as he is a client) with the "private banking group" (the real private banking group, LOL) of a major investment firm. He has a "personal" line of credit with them for several million dollars at 2.5%. He asked them to increase it and/or to consider the UL policies as collateral, or to do a new line of credit at the same rate (using the UL policies as collateral). They are considering it. He also has an excellent relationship with one of the major trust companies and is a client there as well. He asked them if they would give him a line of credit using the UL policies as collateral. They said they would let him know in 24-48 hours.

Thus, if the client as the availability, resources, etc. -- I think there are certain financial institutions that will consider loaning against UL, in certain cases. On more of a mass-market basis, I am unaware of any financial institution that has a formal program for any other type of life insurance other than WL, and I am not aware of any financial institution that "does it" as a part of their regular course of business. I just don't see it being very feasible and "safe" for the bank.

Is anyone aware of any bank that will loan against UL? Thanks.

 

[Tahoe Ray]

Hello everyone,
Are you having trouble passing your driving exams ?

learn more below

Dude...just stop. All of your posts are going to be deleted.

 

[Wasered]

I think that you would easily find various top banks providing loans secured by the monetary value of IUL. Although, as far as I know, such applications have become less popular due to insurance loans. Unfortunately, due to the proliferation of dubious credit institutions, it has become more challenging to find a sufficiently good and reliable loan offer. A friend advice one source when I needed money to reorganize the business Yhdistelylaina kokemuksia: Yhdistelylaina pienillä tuloilla. Perhaps you should also ask around your friends or acquaintances who are well versed in finance.

 

[Allen Trent]

I think that you would easily find various top banks providing loans secured by the monetary value of IUL. Although, as far as I know, such applications have become less popular due to insurance loans.

You would think they would be more popular as bank loans currently are at a much, much lower rates than many life insurance loan rates. A lot of inforce life insurance policies have loan rates of 6-7.5%. if a person has built up a $100k life policy loan balance charging $7k per yr in interest, they might be smart with the newfound home equity from the Real Estate value run up to take a mortgage for 2-3% & pay off the life policy loan, especially for policies that receive a lower dividend rate on the loan balance than the unloaded cash value. Possibly could even tax deduct the bank loan interest charged if they itemize deductions, etc

 

[ejbarraza]

I am looking for a comprehensive list of banks who are offering line of credit or loans secured by the cash value of an IUL.

I have seen some banks doing only WL, some restricting their offers to only some insurer, ...

It would be nice to collect the general wisdom of this forum to compile a list of lender.

The Bancorp Bank lends against IULs with monthly interest-only payments and Merchants & Manufacturers Bank lends against IULs with quarterly interest-only payments.

 

[PrivClientSG]

Interesting, I would have believed that these were very secured loans compared to others. What did go wrong?

What went wrong was that some banks loaned money on policies where the "cash value" -- the collateral -- was not guaranteed. They also didn't understand life insurance, and protect their interest/assignment. That's where the went wrong started.