Policy Loan Calculator

Model a loan against your whole life policy's cash value before you borrow. See your repayment timeline and total interest — and remember: while the loan is outstanding, your full cash value keeps compounding.

How policy loans work

When you borrow against a whole life insurance policy, the insurance company lends you money using your cash value as collateral. Your cash value never leaves the policy — it keeps earning dividends and guaranteed growth while you use the loan. That's the core mechanic behind the Infinite Banking Concept.

Why repayment discipline matters

Policy loans have no required repayment schedule, which is both the biggest benefit and the biggest risk. If unpaid interest compounds for years, the loan can grow to exceed your cash value and lapse the policy — turning a tax-advantaged strategy into a taxable event. Set a repayment plan the day you take the loan, and track it.

Policy loan vs. bank loan

A bank loan requires credit approval, a fixed schedule, and amortized interest. A policy loan needs no approval, has flexible repayment, and your money keeps compounding while borrowed. The trade-off is that discipline is on you — which is exactly why tracking repayment alongside your cash value in one place matters.

Further reading

Independent references on the concepts behind this calculator. VestmentPulse is not affiliated with these organizations. Nelson Nash Institute — The Infinite Banking Concept · Investopedia — Borrowing Against Life Insurance: Pros, Cons, and How-Tos

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