Standard Loan Details

Standard Loan Option

• Borrowing Against Cash Value: With a standard loan, you borrow against your policy's cash value.
• Fixed Collateral Account: Your cash value is moved into a fixed collateral account.
• Declared Interest Rate: Instead of earning potential indexing strategy credits, the account earns a declared interest rate.
• Loan Rate: The loan rate is variable from month to month.
• Spread: The spread between the rate credited and the loan interest charge is usually low for the first ten years.
• Zero Net Interest After 10 Years: From the eleventh year onward, the interest charged is credited back to you, resulting in a net interest of zero.
• Wash Loan/Net Cost Zero Loan: The terms "wash loan" or "net cost zero loan" refer to the same concept.
• Interest Rate Dynamics:
  • Interest rate is charged.
  • Interest rate is credited back.
  • Net interest = 0 (starting year 11)