Can I Borrow Money From My American Income Life Insurance Policy?

American Income Life Insurance is a life insurance company that offers various types of life insurance, including whole life insurance. With a whole life insurance policy, you may have the option to borrow against your policy’s cash value. Here is what you need to know about borrowing from an American Income Life whole life insurance policy.

Overview of American Income Life Insurance

American Income Life Insurance Company is a life insurance provider based in Waco, Texas. The company offers several types of life insurance, including:

  • Whole life insurance
  • Term life insurance
  • Accidental death insurance
  • Supplemental health insurance
  • Final expense insurance

American Income Life sells its insurance policies through independent agents across the United States. The company has been in business for over 70 years and has an A rating from AM Best, indicating excellent financial strength.

What is Whole Life Insurance?

Whole life insurance is a type of permanent life insurance policy that provides lifetime protection as long as you pay the premiums. It also accumulates cash value, which is the policy’s savings component.

Here are some key features of whole life insurance:

  • Lifetime coverage: The policy remains in effect for your entire life, unlike term life insurance which expires after a set period like 10 or 20 years.

  • Level premiums: Your premium payments usually stay the same and are guaranteed not to increase.

  • Cash value growth: Part of each premium goes toward building up the policy’s cash value, which earns interest over time.

  • Loans and withdrawals: You can borrow against or withdraw the cash value, minus any policy loans and interest. This provides access to cash from the policy while keeping it in force.

  • Paid-up benefits: At some point, the cash value may be enough to cover the premiums so you stop making payments, but the coverage remains intact.

Can You Borrow From a Whole Life Insurance Policy?

Yes, most whole life insurance policies allow you to borrow against the cash value that has accumulated. Here is how it works:

  • The cash value is the amount that has built up in the policy from premium payments, interest, and dividends if applicable.

  • You can take out a loan against a portion of this cash value, often up to 90% to 95% of the total amount.

  • Interest is charged on the loan and must be repaid. The rate is usually around 5% to 8% per year.

  • If you die before repaying the loan, the death benefit paid to your beneficiaries will be reduced by the outstanding loan balance and interest.

  • Failing to repay the loan may cause the policy to lapse if the loan value grows too large relative to the cash value.

Borrowing reduces the death benefit that can be paid out. But it allows you access to the policy’s cash value without surrendering the coverage. The option to borrow can be useful in situations like:

  • Paying for a major expense
  • Starting a business
  • Paying tuition
  • Covering medical bills
  • Making home improvements

Does American Income Life Allow Policy Loans?

American Income Life does allow borrowing against whole life insurance policies. However, information about its loan provisions is limited.

Some key points about borrowing from an American Income Life whole life policy:

  • You can take out a loan, but details on the maximum loan amount or interest rate charged are not provided on American Income Life’s website.

  • To find out the specifics on borrowing, you must directly contact an American Income Life insurance agent.

  • The company does not provide any online resources or account system to request a policy loan.

  • Any outstanding loan balance at the time of death is deducted from the death benefit paid to beneficiaries.

  • Letting a policy loan grow too large may cause the policy to lapse if the debt grows bigger than the cash surrender value.

So American Income Life does allow policyholders to utilize the option to borrow against their whole life insurance. But the lack of transparent loan details online makes it difficult to understand the borrowing terms unless you connect directly with an agent.

How Does the Borrowing Process Work?

Since American Income Life does not provide borrowing specifics on its website, you’ll need to speak to an agent to initiate a policy loan. Here are some general steps to give you an idea of what’s involved:

  • Contact American Income Life: Reach out to an agent by phone or request contact online. Explain that you want to take a loan from your whole life policy.

  • Provide policy information: Be prepared to give your American Income Life policy number, name, and other identifying details so the agent can pull up your coverage.

  • Discuss loan details: Ask the agent questions to understand the loan interest rate, repayment terms, maximum loan amount, effect on the death benefit, and impact on the cash value.

  • Fill out paperwork: The agent will have you complete and submit any required loan request paperwork. This authorizes American Income Life to distribute the funds.

  • Receive loan check: Once approved, American Income Life will issue a check with the loan proceeds, usually within a few weeks. The funds plus interest must be repaid at a future date.

  • Make repayments: You will make payments on the loan interest and principal over time. Failing to repay it may lead to a smaller death benefit or policy lapse.

The exact loan steps may vary. But in general you’ll need to contact American Income Life, provide policy info, agree to terms, sign paperwork, then receive and repay the loan.

Pros and Cons of Borrowing From an American Income Life Policy

Borrowing against a whole life insurance policy from American Income Life has some potential upsides and downsides to consider:


  • Access cash from the policy without surrendering the coverage
  • Interest rate charged may be lower than some alternatives like personal loans
  • Opportunity to use the funds for major expenses or investments
  • Loan repayments are flexible based on the policy terms


  • Outstanding loan balance reduces the death benefit amount
  • Must repay the loan plus accrued interest, or policy may lapse
  • Reduces the cash value available for future withdrawals or loans
  • Not as cost effective as withdrawing accumulated cash value (no repayment needed)

Alternatives to Policy Loans

Instead of borrowing against your American Income Life policy, you may want to look into:

  • Withdrawing the cash value: You give up access to the funds taken out but you don’t have to repay withdrawals or interest.

  • Surrendering the policy: Ends the coverage but you get the remaining cash out. Can be costly if you still need life insurance.

  • Taking a 401(k) loan: Allows you to borrow from your retirement savings and repay yourself. No underwriting required.

  • Personal bank loan: May provide larger loan amounts but likely at higher interest rates than borrowing from life insurance.

  • Home equity loan: Also may offer more funds at higher rates, but uses home equity as collateral.

Each option has pros and cons to weigh based on your situation. Consult a financial advisor if uncertain what route is best.

Is Borrowing From American Income Life Insurance a Good Idea?

Here are some things to think about when deciding if borrowing from an American Income Life whole life policy makes sense:

  • How much cash do you need access to? Only borrow what you require.
  • Can you afford to repay the loan plus interest over time? Defaulting can jeopardize coverage.
  • Have you already borrowed a significant percentage of the cash value? Further loans may not be possible.
  • Do you still need the life insurance coverage a loan would reduce? If not, surrendering may be better.
  • Are lower-interest alternatives like 401(k) or personal loans available? Leverage cheaper financing first if possible.

In many cases, alternatives like 401(k) loans or personal bank loans offer lower rates than borrowing against life insurance. And you have to repay policy loans to avoid losing coverage. So weigh your options carefully and only borrow what you absolutely need.

The Bottom Line

American Income Life whole life insurance policyholders do have the option to take out a loan against the accumulated cash value in their policy. But details on loan provisions are not readily available from American Income Life. You need to contact an agent directly to find out the maximum loan amount, interest rate, repayment terms, and impact a loan will have on your coverage.

Policy loans can provide access to funds in a pinch. But think carefully before borrowing as it reduces your death benefit and cash value while accruing interest you must repay. Consider all alternatives and only borrow when absolutely essential so you don’t jeopardize your life insurance coverage.

Frequently Asked Questions (FAQ)

Q: Can I get an American Income Life Insurance policy loan online?

A: No, American Income Life does not offer any way to apply for or request a policy loan online. You must contact an agent by phone or through a contact form to begin the loan process.

**Q: How much can I borrow from my American Income Life whole life insurance

Borrowing Against Your Life Insurance Policy : EXPLAINED!


Can I withdraw money from American Income Life Insurance?

A whole life policy can last for your whole life. While premiums for a whole life policy can be higher than those for term life, whole life policies can also generate a cash value, which you can borrow against or withdraw funds from.

How much can I borrow from my life insurance policy?

The limit for borrowing money from life insurance is set by the insurer, and it’s typically no more than 90% of the policy’s cash value. When your policy has enough cash value (minimums vary by insurer), you can use it as collateral to request a loan from your insurance company.

Does American Income Life have cash value?

American Income Life (AIL) Whole Life Insurance Whole life insurance from American Income Life provides coverage for your entire life and also builds cash and loan value with premium payments. Premiums never increase during your ownership of your whole life policy.

How long do I have to have life insurance before I can borrow money?

Can you borrow against life insurance immediately? No, you cannot immediately borrow against life insurance. You must wait until your policy’s cash value exceeds a certain threshold, and it can take several years to reach that point. The minimum cash value required for a policy loan varies by insurer.

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