Lafayette Life Loan Interest Update

The recent and rapid interest rate increases of 2022 have caused us to make the first adjustment to our policy loan rates in ten years.¹ The policy loan rate is determined by Lafayette Life each month and generally tracks the Moody’s monthly average composite yield on seasoned corporate bonds, which is published by the National Association of Insurance Commissioners. 

What your clients need to know:

• Each policy’s loan rate is set on each policy anniversary and is fixed for the remainder of the policy year.
• Each month, Lafayette Life sets the interest rate for loans and applies it to the policies that have an anniversary in the next month. For example, a rate update posted to the agent website on November 12th will be applicable to all policies with an anniversary on December 1-31st.
• All policies with an anniversary that following month will use that new loan rate beginning on their next anniversary and continuing for all loan activity for a full year. The updated rate applies to any new or current outstanding loan.
• Clients are informed of their updated loan rate in their annual statement.