Variable Loan Interest (VLI)

Variable Loan Interest (VLI) refers to the fluctuating interest rate applied to policy loans that a policyholder may take against the cash value of their policy. Unlike a fixed loan interest rate, the VLI is subject to change and is usually determined based on prevailing market conditions and benchmarks, such as the prime rate. Policyholders should be aware that the VLI can increase or decrease, potentially impacting the overall cost of borrowing from the policy's cash value and ultimately affecting the policy's performance and death benefit.