Life · Chapter 5 · Cash Value
Policy Loan Provision
Definition
Owner may borrow against cash value — no credit check, can't be "called," repay anytime. Technically a collateral assignment of cash value. Unpaid loan + interest reduces the death benefit.
Exam tip
If loan + interest exceeds the cash value, the policy lapses. Loan interest is not tax-deductible. ⚠️ Florida caps fixed policy-loan interest at 10% a year; an adjustable rate is allowed instead, tied to a published index (F.S. 627.4585).
Easy to confuse with
These are what this term gets tested against — if you can't tell them apart cold, drill the contrast.
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