So I’m going to be a bit of a nerd here because I want to be sure we are using the correct wording/terminology.
The best way to access funds is via policy loan because it doesn’t interrupt the compounding effect of the money in the policy and it is also a non-taxable event.
Withdrawing money physically removes your own money from the account and interrupts the compounding effect.
I explain accessing money from a Whole Life policy this way to keep it simple:
There are 3 ways to access money
- The Sad Way
- The Dumb Way
- The Smart Way
The sad way is you pass away and the beneficiary gets the death benefit. Let’s avoid that for as long as possible!
The dumb way interrupts compounding growth.
The smart way, as mentioned, doesn’t interrupt the compounding growth of the cash values and is tax-free.
Utilizing the "Smart Way" allows you to be your banker. You are essentially replacing the car finance company from the equation. All the payments you would send to the car finance company will now be returned to your banking system (the whole life policy) where it will earn a guaranteed tax-free rate of return for the rest of your life!
All of this is possible by becoming your own banker through a dividend paying whole life insurance policy. Why pay other financial institutions when you don’t have to?
So all that shared, it will take 3-5 business days upon request of the loan to see it in your checking account. You’ll need to provide the insurance company with a voided check if they don’t have a checking account on record for you. Also, I strongly recommend setting up a monthly draft for the policy loan repayment for at the least same amount you were sending the car finance company. It's important to be an honest banker with our own money. Please refer to the Grocery Store analogy in the Nelson Nash's book Becoming Your Own Banker. I can help explain the analogy further if you like.
If I can assist with anything I’ve explained here, please let me know. You can reach me here: www.IBC.guru.