Question by marilyn m: what do you think of refinancing your mortgage to get equity and put that equity in a life insurance policy?
Answer by Mrsdonmar
I would put the money in annuity. You can earn interest alot faster and it still be like an insurance. Good Luck
Know better? Leave your own answer in the comments!
This is a terrible idea. For one, unless you lied to your lender, I don’t think they would release more funds to you for investing in your own death. Depending on your age, you could release the equity in your home to secure a second property and use the rental income to invest in a life insurance policy. I’m not a huge fan of life insurance, as the money wil never be yours. Unless you expect to die young or expect to have a lot of debt when you die that you don’t want to leave to loved ones, then I suggest you use the released equity to purchase an income producing asset that will give you money when you are alive rather than when you are dead.
Ask yourself – and ask the person proposing this plan to you to show you – on paper – where you are better off borrowing the equity from your home to put the money in a life insurance policy.
You will have to pay interest on the home equity debt against your house. Are you GUARANTEED to earn more in the life insurance policy than you pay on the mortgage debt?
one of the worst ideas ever. If a sales agent is proposing this to you, you should report him to the Better Business Bureau. This is NOT in your best interest at all and not at all an ethical recommendation from an agent.
I would run in the opposite direction. This is the latest insurance selling technique by the “bottom feeders” of the world designed to generate big commissions for the agents on the ill informed concept that they can turn your equity which you werent going to use into a much larger asset for your beneficiaries. A lot of them tout how the setup can be designed to bypass probate and pass tax free to heirs, etc..Look out!!!
could be one of the worst ideas i have ever heard.
dont do it.