life insurance loan

[jsampiere2]

What is the name of your state (only U.S. law)? CONNECTICUT

I am being charged interest on a loan from my life insurance policy at a higher rate than I initially took it out at. Additionally, I was told that interest accrues on a daily basis on such loan. In essence, I am paying as a revolving charge, or like a retail charge card. Is this legal?......It seems to me, it is not, or should not be.

I have another loan from a different insurance company, and they deduct interest from the interest I paid initially, every payment I make.

Please advise.

Thank You

 

[Zigner]

What do your loan documents say regarding this?

 

[ErinGoBragh]

What is the name of your state (only U.S. law)? CONNECTICUT

I am being charged interest on a loan from my life insurance policy at a higher rate than I initially took it out at. Additionally, I was told that interest accrues on a daily basis on such loan. In essence, I am paying as a revolving charge, or like a retail charge card. Is this legal?......It seems to me, it is not, or should not be.

I have another loan from a different insurance company, and they deduct interest from the interest I paid initially, every payment I make.

Please advise.

Thank You

It is legal and it is typical. You probably have a variable interest rate on the loan. You should call whomever sold you or is servicing the policy and figure out if you can get a fixed rate on the loan; however, daily deductions for interest can continue. When you are ready to fully pay off the loan, you can typically contact the insurance company and they will give you an amount that is good for payoff for x number of days.