What is typically required for a policyholder to take a loan against a whole life policy?

For a policyholder to take a loan against a whole life insurance policy, the most important requirement is that there must be cash value available in the policy. Whole life insurance policies accumulate cash value over time, which the policyholder can access through loans. This cash value serves as collateral for the loan.

The amount that can be borrowed is typically a percentage of the accumulated cash value, and the policyholder is not required to undergo financial disclosures, provide proof of income, or seek approval from an underwriter for the loan. Instead, the loan is simply drawn from the policy's cash value, making it a more straightforward process for the policyholder. This feature is one of the benefits of whole life insurance, allowing policyholders to access funds for emergencies or other financial needs without going through the same underwriting process required for other types of loans.