Frequently Asked Questions
What is the annual interest rate on policy loans?
The annual interest rate on loan and premium debt is 10% p.a. on policies and loans written from 1 January 1983 and 7% p.a. for premium debt on policies written prior to 1983. Rates are reviewed at least annually.
Who can take a loan out on my policy?
A loan can only be taken out on a policy by the policyowner. If there is more than one policyowner, the required loan documentation is required from all policyowners.
How much can I borrow?
The loan amount available will differ on each life insurance policy. The minimum loan you must take is $1,000, with the maximum depending on the value of your policy. For the exact loan amount available on your policy, please contact Foundation Life.
What is the minimum repayment amount?
The minimum repayment amount will be subject to the value of each life insurance policy and the terms agreed. This will depend on several factors like, the amount of the loan taken out, how long the policy has left until it matures, the period in which you wish to repay the loan, etc. For the exact minimum repayment amount, please contact Foundation Life.
What happens if I stop making repayments?
If you fail to ameet your repayment commitments under the agreed loan contract, Foundation Life may be entitled to void the policy in accordance with the provisions of schedule 15 of the Life insurance Act 1908 (as modified by the contract). This means that if the agreed repayment commitments are not met, interest will continue to accrue and once the outstanding loan amount, plus interest and any outstanding premiums outweigh the gross surrender value of the policy, the policy will lapse and life cover will no longer be provided.
How can I find out further information?
Further information can be found in the Key information disclosure document or please contact Foundation Life.
How do I apply for a loan?
To apply for a loan against your policy, there is information we will require before considering your loan application. The New Zealand Credit Contract and Consumer Finance Amendment Regulations 2021 requires Foundation Life to complete due diligence on any policyowner who wishes to take a loan out on their policy.
Although you may have previously taken out loans on your policy, this is a new requirement that came into effect on 1 December 2021. This requires Foundation Life to complete due diligence and assessments of suitability and affordability of new policyowner loan requests.
To enable Foundation Life to assess a loan request, we will require:
- The Loan Request Form. Please ensure that you have completed all sections and the form is signed by all policyowners.
- The Statement of Financial Position Form. Please note a separate form is required for each individual policyowner.
- The last 3 months of bank statements to support information disclosed in the Statement of Financial Position.
The completed forms can either be scanned back to Foundation Life at
Foundation Life
FreePost 521
PO Box 590
Wellington 6140
If you are unable to print the required forms, please contact Foundation Life and we will post the required forms to you.