Policy loans



​Some of Sovereign’s closed traditional life insurance policies which have a cash value allow you to borrow against that cash value after an initial qualifying period (“Policy Loan”).  A Policy Loan is an alternative to surrendering the product, and can allow you to preserve the benefits of your policy.  Your policy provides security for repayment of the Policy Loan, including accrued interest and policy arrears which will be added to your loan balance.  Please note that if at any time your loan balance exceeds the cash value of your policy, your policy will be cancelled (which means that you would also lose any life cover or other benefits of the policy).  If you wish to take out a Policy Loan, you can enter into a Mortgage of Life Policy  agreement with Sovereign.  To read the Mortgage of Life Policy terms and conditions, click here.


Policy Loans attract an interest rate. The current interest rate is 6% per annum, which is compounded monthly and charged against loans, premium arrears and accrued interest on a traditional policy. The Mortgage of Life Policy schedule will display the interest rate applicable at the time the Policy Loan is taken out (the interest rate is subject to change).

We’re here to help

If you have any questions regarding Policy Loans, or would like information on our other products and services, please call your Adviser.  Alternatively, you can call our Customer Relationship Team on 0800 500 108 from 8.00am to 6.00pm Monday to Friday, or email us at enquire@sovereign.co.nz , and we will be happy to help.


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The information contained on this website is general in nature and is not intended as advice. It may not be relevant to individual circumstances and before making any investment, insurance or financial planning decision; you should consult a professional adviser. Copies of our disclosure statements are available on request, free of charge.​