The Loan Interest Rate is the percentage charged when you borrow money against your life insurance policy’s cash value. If you have a whole life or indexed universal life insurance policy, you can take out loans based on the cash value you’ve built up. However, it’s important to understand that this rate will affect how much you owe when you pay the loan back, and it can impact the overall value of your policy.
When you take a loan from your policy, you’re essentially using your own money, but you’ll still need to pay interest on the amount borrowed. If you don’t repay the loan, the outstanding balance, including interest, will be deducted from your death benefit. Knowing the loan interest rate helps you make informed decisions about using your policy as a financial resource.