My question involves insurance law for the state of: Wisconsin
I wanted to take out a loan on my cash value for my whole life insurance policy. When I called a year ago just to get information, the company was able to tell me my current cash value, the interest rate for the loan, and when the interest would start accruing, etc. (Side note: I wrote all of this down.) I recently called again to see if the information had changed. However, the phone representative wouldn't tell me the interest rate. She said she didn't have that information, only the Loan Department does. (She also couldn't tell me my actual cash value, just a rounded value.) I asked if I could speak to the Loan Department. The phone rep told me that the loan department would send me the information in the mail, after I began processing for a loan. I didn't understand why I had to start processing a loan before I knew the interest rate. That didn't make sense to me. I asked if there was anyone I could speak to that could tell me the loan interest rate. She just gave me a scripted reply that the Loan Department is the only one that has that information, and they send that information to you after you start processing a loan. Is that even legal?
Next, the phone rep asks me if I want to begin processing a loan and tells me that it will take 7 to 10 days to process the application plus 15 days for me to get a check in the mail. Huh? It sounded ridiculous to me, especially since I knew that other life insurance companies can process a loan in one day. I immediately thought this is a screwy company and I should just surrender my policy, but I decided that I had better not be impulsive.
Well, I needed to take out the loan, and I wasn't going to be borrowing a large amount. I plan on paying it back very, very soon. Since the process was going to take a long time and the only way to find out the rate was to take out a loan, I decided to just go ahead and process the loan. (To be clear, I normally wouldn't have done this.)
After speaking to some friends, I was told that they are pretty sure it's illegal for the company to not tell me the interest rate. Is that true? I understand with a mortgage loan that Title 12 of the US Code of Federal Regulations says:
Except as otherwise provided in paragraphs (a), (b), or (h) of this section, not later than 3 business days after a lender receives an application, or information sufficient to complete an application, the lender must provide the applicant with a GFE. In the case of dealer loans, the lender must either provide the GFE or ensure that the dealer provides the GFE.
Does that apply to a life insurance loan?
I am frustrated that it has been almost 25 days and I have received nothing in the mail in regards to the loan. Yet within a week of me processing the loan, they sent me two letters about adding on another life insurance policy and upgrading my current policy. I plan on calling the company, but I want to get all necessary information together before I do that.
I wanted to take out a loan on my cash value for my whole life insurance policy. When I called a year ago just to get information, the company was able to tell me my current cash value, the interest rate for the loan, and when the interest would start accruing, etc. (Side note: I wrote all of this down.) I recently called again to see if the information had changed. However, the phone representative wouldn't tell me the interest rate. She said she didn't have that information, only the Loan Department does. (She also couldn't tell me my actual cash value, just a rounded value.) I asked if I could speak to the Loan Department. The phone rep told me that the loan department would send me the information in the mail, after I began processing for a loan. I didn't understand why I had to start processing a loan before I knew the interest rate. That didn't make sense to me. I asked if there was anyone I could speak to that could tell me the loan interest rate. She just gave me a scripted reply that the Loan Department is the only one that has that information, and they send that information to you after you start processing a loan. Is that even legal?
Next, the phone rep asks me if I want to begin processing a loan and tells me that it will take 7 to 10 days to process the application plus 15 days for me to get a check in the mail. Huh? It sounded ridiculous to me, especially since I knew that other life insurance companies can process a loan in one day. I immediately thought this is a screwy company and I should just surrender my policy, but I decided that I had better not be impulsive.
Well, I needed to take out the loan, and I wasn't going to be borrowing a large amount. I plan on paying it back very, very soon. Since the process was going to take a long time and the only way to find out the rate was to take out a loan, I decided to just go ahead and process the loan. (To be clear, I normally wouldn't have done this.)
After speaking to some friends, I was told that they are pretty sure it's illegal for the company to not tell me the interest rate. Is that true? I understand with a mortgage loan that Title 12 of the US Code of Federal Regulations says:
Quote:
Except as otherwise provided in paragraphs (a), (b), or (h) of this section, not later than 3 business days after a lender receives an application, or information sufficient to complete an application, the lender must provide the applicant with a GFE. In the case of dealer loans, the lender must either provide the GFE or ensure that the dealer provides the GFE.
I am frustrated that it has been almost 25 days and I have received nothing in the mail in regards to the loan. Yet within a week of me processing the loan, they sent me two letters about adding on another life insurance policy and upgrading my current policy. I plan on calling the company, but I want to get all necessary information together before I do that.
Life Insurance: Life Insurance Company Won't State an Interest Rate for a Loan
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