Saturday, August 27, 2005

Lowest interest rate for policy loan

An AIA policyholder (Ms Bollard) wrote to the Straits Times to complain that AIA charge 8% for their policy loan.

Other insurers charge from 5.5% to 7%.

There is only one insurer that charge 5.5% for the policy loan, ie NTUC Income. The other insurers charge 6% to 7%.

1 comment:

Aragorn said...

1. A cash value life insurance policy, like a whole life, endowment or education policy accumulates cash value after 2-3 years.

2. You can borrow from the cash value of your policy. This is called a taking "policy loan". You pay interest to the insurance company.

3. At 5.5%, NTUC Income has the lowest interest rate for policy loan.

4. It is better to borrow from your life insurance policy than borrowing against your credit card, which typically charges 18-24% interest p.a. (about 2% per month).

5. Contact your insurance company or insurance agent for more details.

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