Can I Borrow From My AFLAC Life Insurance

Life insurance policies are designed to provide financial security to your loved ones in case of your untimely demise. However, many individuals wonder if they can access the cash value of their life insurance policy while they are still alive, particularly when they are facing financial challenges. One such insurance provider that offers this feature is AFLAC. In this comprehensive guide, we will explore the option of borrowing from your AFLAC life insurance policy, understanding the process, benefits, and potential drawbacks.

Understanding AFLAC Life Insurance

Before delving into borrowing from your AFLAC life insurance, it’s essential to grasp the basics of this type of insurance. AFLAC offers various insurance policies, but for the purpose of this article, we will focus on their life insurance products. AFLAC’s life insurance plans often come in two primary categories: term life insurance and whole life insurance.

Term Life Insurance

Term life insurance provides coverage for a specified period, typically 10, 20, or 30 years. It offers a death benefit to the beneficiaries if the policyholder passes away during the term. However, term life insurance does not accumulate cash value over time, meaning there is no cash value to borrow against.

Whole Life Insurance

Whole life insurance, on the other hand, is a permanent life insurance policy that covers you for your entire lifetime. One of its distinctive features is the accumulation of cash value over time. This cash value is the key to borrowing from your AFLAC life insurance policy.

Borrowing from Your AFLAC Life Insurance

If you have a whole life insurance policy with AFLAC, you may have the option to borrow from the cash value that has accumulated in your policy. Here’s how it typically works:

1. Check Your Policy

Before proceeding with a loan, review your AFLAC whole life insurance policy documents or contact your insurance agent to confirm if your policy allows borrowing against the cash value.

2. Determine the Cash Value

The cash value of your policy is the amount available for borrowing. It increases over time as you pay your premiums and accrues interest. You can usually find the current cash value in your policy statement.

3. Apply for a Loan

To borrow from your AFLAC life insurance, you will need to fill out a loan application provided by the insurance company. You may also need to specify the loan amount you wish to borrow.

4. Interest Rates and Repayment

AFLAC typically charges interest on the borrowed amount, which accumulates over time. The interest rates can vary, so it’s essential to understand the terms and conditions of your specific policy. Repayment is usually not required as long as there is sufficient cash value in the policy to cover the interest. However, it’s important to repay the loan to prevent it from reducing the death benefit for your beneficiaries.

5. Tax Considerations

One advantage of borrowing from your AFLAC life insurance policy is that the loans are generally not taxable. This means you won’t have to report the loan as income on your tax return.

Benefits of Borrowing from AFLAC Life Insurance

Now that you know how to borrow from your AFLAC life insurance policy let’s explore some of the benefits:

1. Quick Access to Funds

Borrowing from your life insurance policy is often faster and more straightforward than applying for a traditional bank loan. This can be particularly beneficial in emergencies.

2. No Credit Check

Since you are borrowing against your policy’s cash value, there is no need for a credit check or extensive paperwork. This makes it accessible to individuals with less-than-perfect credit.

3. Competitive Interest Rates

Life insurance policy loans typically offer competitive interest rates compared to other forms of borrowing.

4. Tax Advantages

As mentioned earlier, loans from your AFLAC life insurance policy are generally not taxable. This can result in significant tax savings.

Potential Drawbacks

While borrowing from your AFLAC life insurance can be advantageous, it’s essential to consider some potential drawbacks:

1. Reduced Death Benefit

Borrowing against your policy’s cash value reduces the death benefit that will be paid out to your beneficiaries upon your passing. It’s crucial to manage your loan and interest payments to minimize this impact.

2. Interest Accumulation

The interest on the loan can accumulate over time and affect the cash value of your policy. Failing to repay the loan may eventually lead to a lapse in coverage.

3. Policy Surrender

If you continually borrow from your policy and the cash value is depleted, your policy may eventually lapse, leaving you without coverage.


1. Can I borrow from my AFLAC life insurance if I have a term policy?

No, AFLAC term life insurance policies do not accumulate cash value, so there is no cash value to borrow against.

2. Is the interest on a loan from AFLAC life insurance tax-deductible?

Interest on life insurance policy loans is generally not tax-deductible.

3. How does borrowing from my AFLAC life insurance affect my beneficiaries?

Borrowing reduces the death benefit that will be paid out to your beneficiaries. It’s essential to manage the loan to minimize this impact.

4. Can I repay the loan from my AFLAC life insurance at any time?

Yes, you can repay the loan at any time to prevent it from affecting your policy’s cash value and death benefit.

5. What happens if I don’t repay the loan from my AFLAC life insurance?

If the loan is not repaid, it may eventually lead to a lapse in your policy, resulting in a loss of coverage.


Borrowing from your AFLAC life insurance policy can be a valuable financial tool when you need quick access to funds. However, it’s essential to fully understand the terms and consequences of taking out a loan against your policy. Proper management of the loan and repayment is crucial to maintain the financial security of your loved ones.

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