Why are only Whole Life policies eligible for a loan?

We lend against whole life policies because of the guaranteed nature of the cash value accumulated in these types of policies.

Will you loan against my death benefit?

No, we will only lend against the guaranteed cash value up to 95%.

How do I know how much cash value I have?

Request a policy in force illustration (sometimes referred to as a policy status or policy data report) from your agent or home office which shows the guaranteed amount of cash value.
We are happy to obtain this report for you, provided we have your agent’s contact information and your consent in writing.

How much can I borrow?

The borrowing base may not exceed 95% of the guaranteed cash value at any time during the term of your loan.

How fast is the process?

Provided a signed application, ID, social security number, and policy values report has been submitted, the current turnaround time for a term sheet is not more than 48 hours. A term sheet is a non-binding commitment letter to the borrower containing interest rates, monthly interest payments, loan maturity information, and available credit line based on in force illustration or values report.  Upon receipt of a signed term sheet, and confirmation of an assignment to the policy, closing is scheduled at borrower’s convenience. Confirmation of an assignment to the policy varies among carriers and may take up to 7 – 10 business days. If time is of the essence, you may reach out to us and request your application be processed expeditiously at no cost. In most cases, we are able to get the assignment recorded more quickly with your agent’s assistance.

Do you run a credit check?

Absolutely not.

Will the loan show up on my credit report as an inquiry?

No, because we do not run credit, nor do we inquire on your credit worthiness with any bureau at any time during the application process and for the duration of the loan. We request a social security number only for authentication and verification purposes.

What is the Interest Rate and Annual Percentage Rate?

We work with two types of rates: the London Interbank Offered Rate commonly referred to as the “LIBOR” and the Prime as reported by The Wall Street Journal. Borrowers are free to choose which benchmark rate to base their loan.

What are your fees?

There are no fees associated with the application process or closing.

How do loans based on Libor and Prime differ?

The interest rate of loans based on LIBOR are assessed and subject to change every 30 days. The interest rate of loans based on Prime are assessed and subject to change only when the Federal Reserve meet and decide to make a change to rates; since the Federal Reserve meeting are held every six weeks, the interest rate is subject to change less frequently.

What is the duration of the loan?

Lines of credit are available up to 36 months and term loans are available up to 60 months.

What happens at the maturity date of the loan?

One of three things:

1) the borrower pays the loan out of pocket;
2) the policy owner may request the funds owed be collected from the insurance carrier, thereby creating a carrier loan;
3) the borrower requests a loan modification to extend the maturity date, increase the loan amount or both with one document.

What is the difference between a line of credit and a term loan?

With a line of credit, the borrower may pay down and reborrow principal. With a term loan, principal paid down may not be reborrowed and our credit card product is not offered with term loans. There is no difference in interest rates.

How do I increase my line of credit?

Six months prior to maturity of the loan we, evaluate the cash value in your policy to determine if there is sufficient growth in cash value for an increase. If you would like to increase your loan principal prior to your maturity date, please contact your Kensington case manager to discuss your options.

What is the difference between a personal loan and a business loan?

Personal loans are made to an individual and used primarily for personal, family, or household purposes, such as to buy a car or repair a roof, or purchase a computer, or home appliances. Business loans are loans specifically intended for business purposes and the business is obligated to repay. The loan may be used to pay for salaries and wages, inventory or equipment, and new construction or investment.

A Kensington business loan is unique in that the loan is made directly to the business as opposed to the traditional bank’s method of making the loan out to an individual who checks a box that the loan is for business purposes. With Kensington, the company’s name appears on the loan documents as the borrower, not an individual. For accounting and tracing purposes, the proceeds are suitably deposited to the company’s account, and interest payments are collected from that company’s account.

How do I access my line of credit?

The borrower may request an advance, by submitting a Notice of Borrowing electronically and in most cases, funds are received within 24 – 48 hours of the request.

How will I receive the funds at closing?

The proceeds of loan will be wired to the bank account provided by the borrower on the Disbursement Schedule.

What if I do not have enough cash to meet the minimum?

One way to overcome the minimum loan amount threshold is to add other policies to the loan. We can group an infinite amount of polices from various carriers for a single loan.

What if I have more policies?

We can group an infinite amount of polices from various carriers for a single loan so long as each policy owner has some nexus to the prospective borrower.

What if I already have a loan with another bank or my insurance carrier?

Kensington will pay off all existing loans with the proceeds of the new loan.

What happens if I cannot pay off the loan at maturity?

Kensington may approve a request for a loan modification to extend the maturity date; or the funds may be collected from the insurance carrier, thereby creating a carrier loan.

What does it mean to be assigned to my policy?

The Assignee shares some of the same rights as the policy owner to the extent limited by the carrier’s collateral assignment agreement.

How do I get started?

Click Apply Now on this website: https://www.kensingtonfa.com/apply-now/

You may also contact our office at 877-298-7331, to complete an application manually.

Where can I find a policy status?

You can request this policy value report from your insurance agent or agency office. We are happy to obtain this report for you, provided we have your agent’s contact information and your consent in writing.

Is there a prepayment penalty?

No.

Are there fees for cash advances?

No.