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.