Understanding Borrowing Against an Aflac Whole Life Policy

How Policy Loans Work with Aflac Whole Life Insurance

A policy loan lets you tap the cash value of an Aflac whole life insurance contract without surrendering the policy. The insurer uses the accumulated cash value as collateral, offering you a loan at a rate set by Aflac. Interest accrues while the loan is outstanding, and any unpaid balance reduces the death benefit.

Key Benefits of Borrowing Against Cash Value

Accessing cash this way avoids credit checks and can be faster than traditional loans. The loan amount is limited to a percentage of the cash value—typically up to 90%—so the policy remains in force. Because the loan is secured by your own policy, the risk of default is low, and you retain ownership of the death benefit, albeit reduced by the loan balance.

Potential Drawbacks and Risks

Unpaid interest compounds, eroding the cash value and potentially causing the policy to lapse if the loan exceeds the remaining cash value. A lapse eliminates both the death benefit and the tax‑advantaged status of the cash value. Additionally, borrowing reduces the amount your beneficiaries will receive, which may defeat the policy's primary protection purpose.

Factors to Evaluate Before Taking a Loan

• Current cash value and the maximum loanable amount.
• Interest rate terms and how they compare to other financing options.
• Repayment flexibility and the impact on the death benefit.
• Long‑term financial goals and whether the loan aligns with them.

Comparison of Loan Options

Where to Find Reliable Information

Review your policy's illustration or contact Aflac's customer service for the exact cash value and loan terms. Independent insurance advisors can provide unbiased comparisons, and state insurance department websites often list consumer guidelines for policy loans.