Loan Value (Health Care) Law and Legal Definition

Loan value is the maximum amount that a beneficiary can borrow from the insurer, under a policy using the policy cash value as collateral. This is the amount the insurance company will lend for interest to the insured, after the policy has been in force for a certain length of time. When loans are made against life insurance coverage, the loan value of the transaction is determined by using the current cash value of the polic.