Loan-to-Value (LTV)
Loan-to-value (LTV) is the ratio of your total outstanding policy loan balance to your total cash value. It expresses what percentage of your cash value is currently deployed via loans.
Formula: LTV = Total Loan Balance ÷ Cash Value × 100
For example, if you have $180,000 in cash value and $90,000 in outstanding loans, your LTV is 50%.
LTV is an important figure in whole life banking because carriers typically allow loans up to 90–95% of cash value. Approaching that limit reduces your flexibility to take additional loans. Policy Stack shows a factual indicator when LTV approaches carrier limits — this is informational, not a warning or judgment.
Key points:
- LTV can be 0% (no loans outstanding) to the carrier's maximum
- Higher LTV means more capital is deployed and less is available for new loans
- LTV naturally rises when you take loans and falls as you make loan repayments
Related terms: Loan Balance, Cash Value, Available Cash Value