Montana State Life Insurance Practice Exam 2025 - Free Life Insurance Practice Questions and Study Guide

In Montana, the maximum interest rate for policy loans is set at 6% per year. This rate reflects the legal framework established to ensure that policyholders are not subjected to excessively high interest rates on loans taken out against the cash value of their life insurance policies.

Setting the maximum interest rate at 6% helps maintain affordability for borrowers, while also ensuring that insurance companies can adequately manage the financial aspect of policy loans. This standard is part of regulatory measures designed to protect consumers and uphold the integrity of insurance practices in the state.

Understanding this limit is essential for both consumers and insurance professionals, as it informs loan decisions and guides policyholders on the financial implications of borrowing against their life insurance policies.