Policy Loan Interest Cap

Under F.S. 627.4585 (the course note's "672.4585" was a typo), an insurer may not charge a fixed policy loan interest rate above 10% per year, subject to policy restrictions. Alternatively the insurer may use an adjustable interest rate with a maximum tied to the monthly average of Moody's Corporate Bond Yield Average (or the policy's guaranteed cash-value rate plus 1%, if higher).

Fixed loan rate: 10% ceiling. Floating rate: Moody's corporate bond index sets the leash.