Your whole life policy does more than protect your family — it doubles as a place to bank from. Every policy in Policy Stack opens a loan account the moment you add it — whether or not you are already carrying a balance. That account is how you put your cash value to work without interrupting its growth.
Every policy has a loan account
When you add a policy, Policy Stack creates a policy-loan account for it right away. If you are not carrying a loan yet, it opens at $0 — nothing is borrowed, and your full cash value is available to draw against. If you already have a loan balance when you add the policy, that balance is your starting point. Either way, the account gives you a place to record a draw and watch the balance move over time.
What a draw is
A draw is capital you borrow against your policy's cash value. The defining feature of whole life banking: your cash value stays in the policy and keeps compounding as if you never touched it, even while a draw is outstanding. The carrier lends against the cash value as collateral — the cash value itself never leaves. Each draw raises your loan balance by the amount drawn.
Loan balance and capitalized interest
Your carrier charges interest on the outstanding balance. If you do not pay that interest separately, it is added to the balance as capitalized interest — the balance grows by the interest amount. You decide how to handle it: pay interest as you go, or let it capitalize. Policy Stack records whichever path you take.
Some carriers price each draw at its own rate. A draw can carry an optional rate of its own — otherwise it uses the policy's default loan rate — and when rates differ across draws, the loan displays the weighted average.
Loan-to-value (LTV)
LTV is your loan balance divided by your cash value, shown as a percentage — how much of your cash value is currently drawn against. It is a factual gauge, not a grade. The only time Policy Stack flags it is above 90%, where a draw approaches carrier limits.
Repaying restores your capacity
A loan repayment lowers the balance and frees up Available CV to draw against again. There is no fixed schedule — you decide when and how much to repay. As the balance comes down, your capacity to draw comes back up.
The cycle
That is the rhythm of whole life banking: draw capital out, put it to work, repay to restore capacity, then draw again. Your cash value compounds the entire time. This repay-and-redraw loop — recycling the same capital through your own system — is what gives the model its velocity.
Recording it in Policy Stack
- Record a draw from a policy's Loans tab. When prompted, characterize what the draw was for — deployed into a recorded asset, or personal use.
- Record a loan repayment per loan, or log one payment and let Policy Stack distribute it across active loans on the policy. See Tracking Policy Loans and Recording a Policy Loan.
- When you record a carrier snapshot, include the current loan balance so your records stay reconciled with the carrier. See Snapshot Loan-Balance Review.
- Already carrying a loan when you started tracking? Set a starting balance or rebuild the history from the Loans page. See Adding Past Loan Activity.
Related terms: Policy Loan · Loan Balance · Loan-to-Value · Facility Draw