What Happens If My Credit Limit Drops Below My Balance?
Because a Variable Life account's credit limit can move with the market, it's possible for a market decline to push your credit limit below your account balance. Here's exactly what happens if that occurs, and what you can do about it.
Your Draws Are Paused
As soon as your balance goes above your credit limit, you won't be able to draw any more from your line. Draws can resume once your available credit is restored — either because your credit limit recovers or because you pay down your balance.
We Recommend Making a Payment
We recommend making a payment to bring your account back into good standing and protect it from any further negative market movement, rather than waiting to see if the market recovers. If your account reaches this state, we'll send you an email — at most once a week — so you always know where things stand.
If the Gap Grows Too Large, Payment Is Required
If your balance climbs far enough above your credit limit, you'll need to make an immediate payment to bring your account current. If you don't, your line may be closed and the balance satisfied using your policy — through a policy loan, a partial surrender of your cash value, or both.
We'll Warn You Before It Happens
Because your credit limit can decrease, we'll warn you before you draw if doing so would bring your balance within 5% of your credit limit — since a market move of that size is realistic, and could put your account over its limit as soon as the next business day.
Have Questions?
If you have any questions about your account's balance or credit limit, please reach out to our Support Team at support@inclined.com.