Risk life insurance as loan security?

Hello everyone,

I have heard that term life insurance or whole life insurance policies can be accepted by banks as additional collateral if there is not enough other security. Does anyone have experience with this or know to what extent such insurance policies can be used as collateral for a loan?
What I am especially interested in is knowing whether such an insurance is sufficient to provide the bank with more security in case the income evaluation or other collateral becomes tight. I would appreciate your experiences and tips!

Thanks in advance!

Many life insurance policies contain clauses stating that they do not pay out in the event of suicide. This is statistically much more likely in the case of [Schrottimmobilien] and construction ruins caused by bankrupt vulture developers than the building owner being struck by lightning.

I would not categorically exclude that - with one of my apartments with a bullet loan, I used a LV as a payment method.

It was completely hassle-free...

I wouldn’t rule that out across the board – I had a [LV] as a payment method for one of my apartments with a bullet loan.

Was completely trouble-free...

A capital-forming life insurance might possibly be accepted. A term life insurance rather not. It only pays out in the event of death.

Many life insurances contain clauses stating they do not pay out in case of suicide

I think I once read that used to be the case but no longer is. However, our term life insurances have very long waiting periods for suicide cases. 3 years or so.

Hello everyone,
I heard that term life insurance or whole life insurance policies are accepted by banks as additional collateral

So what is it now?

Term life insurance is purely death coverage, while whole life insurance is more of an investment with death benefit coverage. These are completely different types of insurance.

You can of course pledge the whole life insurance policy to the bank as collateral at the respective surrender value, and it is counted as equity.

Term life insurance also serves the bank as collateral, but only as loan protection in case of the unexpected death of the borrower.

I wouldn't categorically exclude that - I had a life insurance as a payment method with one of my apartments with a bullet loan.

Was completely trouble-free...

It is no longer so easy today due to tax changes. It actually hardly occurs in practice anymore.