Life Insurance FAQs - Loans

How does a loan work?

A loan on your life insurance policy is taken by borrowing against the cash value of the policy. Loans do not need to be repaid but the loan balance will be deducted from the face amount of the policy upon the death of the insured. Loans do accrue interest daily, at an annual interest rate, as stated in the policy. The owner will be billed for the interest due, approximately 30 days prior to the policy anniversary. If interest is not paid by the policy anniversary, the interest will be added to the loan balance.

How can I take a loan against my policy?

The owner of the policy may request a loan by completing the Policy Loan section of the Policy Change Request Form. In order to take the maximum loan available the policy must be paid to the current year's policy anniversary. If the policy is not paid to the anniversary a loan amount lower than the maximum may be taken. The owner may contact our Customer Service Center to get further information on the maximum loan amount available.

What is an Automatic Premium Loan?

An Automatic Premium Loan is a non-forfeiture option that is elected at the time of application. It is an option that allows the policy to stay in force if the premium is not paid and the policy has cash value. If a premium has not been paid within 60 days from the due date, we will automatically take a loan, in the amount of the premium, against the cash value and apply it to the premium due. Whenever, an Automatic Premium Loan occurs the owner will receive a notice informing them of the transaction.

How do I repay a loan?

If the owner has received the Dividend/Interest Statement, they can pay off the loan balance and interest as shown on the statement. If paid by the policy anniversary, there will be no further interest charged. If the owner has not received the Dividend/Interest Statement, as it is not 30 days prior to the policy anniversary, please contact our Customer Service Center for the loan payoff amount. Please be sure to specify when you will pay the loan as interest accrues daily.