What is the maximum interest rate for a life insurance policy loan in Virginia?

The maximum interest rate for a life insurance policy loan in Virginia is set at 8%. This is consistent with regulations established to protect policyholders from excessively high loan interest rates while also ensuring that insurers can maintain financial viability.

When a policyholder takes out a loan against the cash value of their life insurance policy, the insurer can charge interest on that loan. By capping the interest rate at 8%, the state aims to balance the interests of both the policyholders and the insurance companies, allowing borrowers to access the funds they may need without being subjected to predatory rates.

Understanding this rate is crucial for policyholders, as it impacts the overall cost of borrowing against their policy and can affect the policy's value if not managed properly. It's essential for individuals to be aware of these regulations when considering a policy loan, as it affects financial planning and long-term outcomes related to their life insurance policies.