Borrowing Against a Primerica Life Insurance Policy: How It Works

Eligibility and Policy Types

Only permanent life insurance policies that build cash value, such as Whole Life or Indexed Universal Life offered by Primerica, allow policy loans. Term policies do not accumulate cash value, so they cannot be used for borrowing.

How a Policy Loan Is Structured

A loan is taken against the accumulated cash value, not the death benefit. Primerica typically sets a maximum loan amount at a percentage of the cash value—often around 90%. Interest accrues from the date the loan is disbursed, and the outstanding balance is deducted from the death benefit if it isn't repaid.

Costs and Repayment

Interest rates are usually lower than credit‑card or personal‑loan rates, but they are variable and set by the insurer. There is no fixed repayment schedule; you can pay back any amount at any time. If the loan plus accrued interest exceeds the cash value, the policy may lapse.

Impact on Coverage

Any unpaid loan reduces the death benefit available to beneficiaries. If the loan balance grows large, the policy could terminate, eliminating both the death benefit and any remaining cash value.

Alternatives to Policy Loans

Consider other sources of financing—personal loans, home‑equity lines, or retirement account withdrawals—especially if you need a large sum or a longer repayment term. These options may have clearer terms and less risk to your life‑insurance protection.

Steps to Take Before Borrowing

1. Verify that your Primerica policy is a permanent type with cash value.2. Request a current cash‑value statement from Primerica.3. Ask for the exact loan‑to‑value limit, interest rate, and any fees.4. Calculate how the loan will affect the death benefit and policy longevity.5. Compare the total cost of the loan with alternative financing options.