How to Access Cash Value and Policy Loans in Whole Life Insurance (Part 3 of 6)
Part 1: The Fundamentals of Whole Life Insurance
Part 2: Understanding Dividends & Interest
Part 3: How to Access Cash Value & Policy Loans
Part 4: How Whole Life Insurance Premiums Work
Part 5: Strategic Uses of Whole Life Insurance
Part 6: Using Whole Life Insurance for Legacy Planning
When people hear “life insurance,” they often think of death benefits. But if you’re working with someone who understands how to build wealth with whole life, you know the real power isn’t just in what it protects—it’s in what it unlocks and what it allows you to build.
The power of what it unlocks is in the death benefit. The power of what it builds is found in your cash value.
At StoneCentury, we don’t treat cash value as a side benefit. It’s the reason we design policies the way we do. Because access to capital—when structured right—is a strategic advantage.
Let’s walk through exactly how to access your money, how quickly you can use it, and how to treat policy loans with confidence and control.
How Do I Get Access to the Money?
Whole life insurance policies accumulate cash value that you can access in two ways:
Withdrawals (less common)
Policy loans (our preferred method)
Withdrawals reduce your cash value and death benefit permanently. Loans, on the other hand, allow you to access the money without interrupting growth—because you’re borrowing against your policy, not from it.
This is how you leverage the living benefits of whole life insurance to build wealth. It’s like having your own line of credit, collateralized by your growing equity.
For example, you can use whole life insurance to buy real estate.
Why Uninterrupted Compounding Matters
When you borrow against your policy instead of withdrawing from it, your full cash value continues to earn dividends and compound growth—as if you never touched it. That’s the power of uninterrupted compounding.
Instead of pausing your progress every time you use your money, you let your capital keep working in the background. This is what banks, corporations, and wealthy families have done for generations—access liquidity without stopping growth.
Over time, this creates an exponential advantage. You’re not just using money—you’re using money that’s still growing uninterrupted.
How Soon Can I Access the Money?
If your policy is designed for early cash value (as a lot of ours are), you can often access 50– 80% of your first-year contributions within the first few weeks or months of the policy being active.
Contrast that with traditional retirement accounts:
No penalties
No waiting until age 59½
No taxes if loans are structured properly
You don’t need permission, a qualifying event, or market conditions to cooperate. This is contractual capital access, available when you need it.
How Do Policy Loans Work?
When you take a policy loan, you’re borrowing against your cash value. The way this works is you give the insurance company your policy as collateral and they give you money from their General Fund. By doing this, your cash value continues to grow uninterrupted since we did not remove any money from the cash value. The insurance company gives you the money—your cash value stays intact and continues to earn dividends and grow.
Here’s the beauty of it, when you ask for it:
No credit check
No qualification
No effect to your debt-to-income ratio
No questions on what the money is being used for
Your loan is secured by your policy. The loan balance accrues interest, but you decide when, how, and if you repay it.
This is why many of our clients use policy loans for:
Real estate investments
Business funding
Emergency reserves
Supplemental Retirement income
The key is this: you’re not interrupting your compounding. Your money keeps working even while you use it.
What’s the Loan Interest Rate, and Who Sets It?
When you borrow against your policy, you’re creating a policy loan with the insurance company. When you borrow from the insurance company, they set the interest rate.
The interest rate on that loan depends on:
The company you’re working with as they set their loan rates
Depending on the interest rates within the economy, most companies will use the guaranteed growth rate + 1% in a low-interest rate environment or they will use the Moody’s Bond Index
The insurance companies loan structure (fixed or variable)
If it’s fixed most loans will be set one time a year at the beginning of the year
If it’s variable, the rate will change each month. If this option is chosen your rate will be locked in for 12 months once the loan is taken
As of this writing (June 2025), policy loan rates are hovering around 5-6.5%.
Remember, while the insurance company determines the interest rate, you determine the how, when, and if
This interest is charged in arrears on the policy loans, which allows you to pay policy loans back to principle first, helping create immediate liquidity and faster pay off schedules.
How Do I Pay Back Loans?
While repayment isn’t required on a fixed schedule, we coach our clients to treat their policy loans like private bank loans, not as “free money.”
Smart repayment strategies include:
Interest-only payments to preserve cash flow.
Repaying principal on a custom schedule.
Redirecting cash flow from assets purchased with the loan.
Using the same bank terms you would have gotten if you chose the bank
The point is not to create stress, it’s to maintain flexibility and integrity in how you use your policy as a cash flow engine.
How Long Does It Take to Get the Money?
Most policy loans are funded in 3 to 5 business days, depending on the carrier and delivery method (ACH or wire). Some can be even faster if you’re set up for electronic servicing. What most companies will share is that it needs 7-10 business days to process and be wired.
You’re not at the mercy of market volatility or bank underwriters. You control the timing.
This speed and simplicity is why so many of our clients build an entire private banking strategy around their policies. Liquidity is power, especially when opportunities require fast action.
Why This Matters
Most people walk into a bank and apply for money.
Our clients become the bank.
Your whole life policy, properly designed, gives you a permanent, growing, tax-advantaged source of capital that you own and control.
Used wisely, it becomes the backbone of your personal economy. It stabilizes your investment strategy, shields you from uncertainty, and lets you seize opportunities with confidence.
Learn How the Rockefellers Used This Strategy to Build a Family Bank
Want to see how families like the Rockefellers used whole life insurance—not just for protection, but as a generational liquidity engine?
Get your free copy of What Would the Rockefellers Do?
This guide shows you how to use whole life as a private bank, what to do with the capital, and how to build long-term financial control.
Click here to request your free copy.
