I owe a mortgage on the home I presently live in. I want to buy another home and to pay for it with a loan from my life insurance. I plan to pay back the life insurance when I sell my present home. Does this sound like a sane plan? If no, why not?
Terry Says: The only way it doesn’t work is if you die with the loan outstanding! Then your heirs will be stuck with two homes to sell — and depending on the circumstances that might be a problem. If you decide to go ahead, be sure you understand the terms of the loan, when it must be repaid, and the consequences if you miss the deadline.