One Transaction. Many uses.
A cash value loan is a financial transaction in which a policyowner borrows against cash value in a universal life or a whole life insurance policy and uses the policy as collateral for the loan. Such loans represent much more than just the chance to borrow money. With the assistance of an experienced advisor, cash value loans can be a springboard to achieving a policyowner's broader financial and personal objectives.
Gracie Point's funding structure allows us to give 100% credit to the low point of the policy's cash surrender value toward the collateral requirement instead of applying a "haircut" to the cash value (and requiring the client to post more collateral). Gracie Point's loans feature a maximum loan-to-value ratio of 100%, no ongoing financial requalification for 20 years, and no personal guarantees.
What is Cash Surrender Value ("CSV")?
Cash Surrender Value is the amount that the insurance company will pay on a given life insurance policy if the policy is cancelled prior to the death of the insured. It is a function of such things as premiums paid into the policy, investment performance by the carrier, mortality charges and surrender charges.
Where can I find out how much CSV I have?
You can look at the loan illustration. Usually there are a few different types of CSV - guaranteed and non-guaranteed amounts. Gracie lends primarily against guaranteed cash surrender value.
What types of policies have CSV?
Generally, most universal life and whole life policies have a cash value component.
Do some policies work better than others?
In the early years, policies with a high cash value rider generally work better because there is a higher amount of cash value in the policy. In the later years, most universal and whole life policies with cash value work equally.
Can I borrow up to the CSV amount?
Yes. You can use the minimum cash value amount over a designated period of time as collateral for a loan. This amount varies and isn't always obvious from the policy itself. Please contact your broker to help you determine exactly what you can borrow.
What is the term of a Gracie Point policy loan?
20 years, subject to certain conditions.
Do I have to requalify?
No, you don't have to requalify, unlike for other long term premium finance loans.
Do I have to provide a personal guaranty?
No, you don't have to provide a personal guaranty which might reflect adversely on your credit score.
What if I no longer want the loan or need the policy?
You may prepay the loan without any prepayment penalty, at any time.
Do you have preferred carriers?
Yes, we are accepted to work with many different life insurance carriers. See that list here.