What is the maximum interest rate typically stated in the loan values clause?

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The maximum interest rate typically stated in the loan values clause is often 8 percent. This rate is significant because it represents the maximum amount of interest that can be charged on a policy loan, which is a loan taken against the cash value of a life insurance policy. This interest must remain reasonable to ensure that policyholders can manage the costs associated with borrowing against their policies. The specified rate is intended to protect policyholders from excessively high charges that could lead to a decrease in the policy's cash value or death benefit if not managed properly. Policies often adhere to this rate as a standard practice to promote fairness and transparency in the borrowing process associated with life insurance, ensuring that the policyholder's financial obligations remain manageable.

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