To submit a Transamerica loan request form, put your request in writing and send it through the channel that matches your product: life insurance policyholders mail or fax a signed request (or use the Policy Service Request form MPS61008T) to Transamerica in Cedar Rapids, while most retirement plan participants file the request online through the MyTransamerica portal or through their employer’s plan administrator. The information you must include, the limits on what you can borrow, and the turnaround time all depend on which type of account you are borrowing against.
Life Insurance Policy Loan Requests
You can borrow against a Transamerica life insurance policy only if it has accumulated cash value. Term policies and certain other types do not qualify.
Log in to Transamerica’s customer service portal and open the policy summary page. Your maximum available loan amount appears under the Current Account Summary section. That figure is the ceiling for your request.
Transamerica requires all life insurance loan requests in writing. A letter or fax works, and the official Policy Service Request form (MPS61008T) has a loan section where you can enter either a specific dollar amount or ask for the maximum available. Whichever format you use, your request must include:
- The insured’s name (the person covered by the policy)
- The policy or certificate number, found on your policy documents or online account summary
- The specific loan amount you want, up to the maximum shown in your account
- The policyowner’s signature and the date
Send the completed request to one of the following:
- Mail: PO Box 189, Cedar Rapids, IA 52406-0189
- Fax: 972-881-4527 (put the insured’s name and policy number on the cover sheet)
Allow up to three weeks to receive a check.
What the Loan Does to Your Policy and Your Taxes
Receiving the loan is not a taxable event. The exposure comes later. If the policy lapses or you surrender it while a loan balance is still outstanding, the IRS treats any gains above your cost basis (total premiums paid) as ordinary income. The tax can be large even though no cash comes back to you, because the loan payoff consumes the remaining cash value while the tax is calculated on the full gain.
There is no fixed repayment schedule. You can pay any amount at any time or let the balance ride, but unpaid interest is added to the balance, and if the total loan exceeds the policy’s cash value, the policy lapses.
Retirement Plan Loan Requests (401(k) and 403(b))
Retirement plan loans run on a different track. Federal tax law sets the maximum, the repayment window, and the consequences of default. Many participants can start a request inside the MyTransamerica portal, which walks you through selecting the loan type, entering the amount, and confirming repayment terms. Some plans instead route the request through the employer’s plan administrator, and paper forms are available through the portal’s service forms page or from your benefits office.
Whichever route you take, have this information ready:
- Your plan or account number
- Your Social Security number
- The exact loan amount
- Your disbursement preference (check or electronic deposit, if the plan offers both)
For electronic funds transfer, you will need your bank’s nine-digit routing number and your account number. Some plans also ask you to indicate federal and state income tax withholding, though a loan that meets all the requirements of IRC Section 72(p) is not treated as a distribution and is not subject to withholding.
How Much You Can Borrow
Under IRC Section 72(p), the maximum is the lesser of 50 percent of your vested account balance or $50,000. The $50,000 ceiling is reduced by the highest outstanding loan balance you carried during the 12 months before the new loan. If you had a $20,000 loan outstanding six months ago and have since paid it off, your current cap is $30,000 even though nothing is currently owed.
If 50 percent of your vested balance is below $10,000, some plans allow up to $10,000 anyway. Plans are not required to offer that exception.
Loan Types and Repayment
Most plans offer two options. A general-purpose loan requires no documentation of how you use the money and must be repaid within five years. A primary residence loan, used to buy or build your main home, can extend beyond five years, with the exact term set by the plan.
Both require substantially level amortization, meaning roughly equal payments at least every quarter. In practice, most plans collect through automatic payroll deduction each pay period. When the loan is issued, Transamerica sends an amortization schedule showing the payment amount and frequency.
The interest rate is set by the plan document and is typically the prime rate plus one percentage point. The interest goes back into your own account.
You can repay the balance in full at any time, but partial prepayments are not allowed. To pay off early, send a cashier’s check or money order to your plan administrator at your employer, who forwards it to Transamerica with confirmation that the loan is settled.
Spousal Consent
Some plans require your spouse’s written consent before a loan can be issued. This applies most often to defined benefit and money purchase pension plans, which are subject to qualified joint and survivor annuity rules under ERISA. Certain 401(k) plans also carry the requirement depending on how the plan document is written. Where consent is needed, the spouse’s signature must be witnessed by a notary public or a plan representative.
Processing Time
Transamerica processes retirement plan loan approvals received before 4:00 p.m. Eastern Time overnight, with the check cut the next business day. That is Transamerica’s portion of the timeline. If your plan requires employer or third-party administrator approval first, the total turnaround depends on how quickly that approval reaches Transamerica. Mailed checks add standard delivery time; electronic deposit, where offered, is faster.
What Default Looks Like
A retirement plan loan that is not repaid on schedule becomes a deemed distribution. The IRS treats the outstanding balance as a taxable withdrawal, and you owe ordinary income tax on the full unpaid amount. If you are under age 59½, a 10 percent additional tax applies on top of regular income tax unless you qualify for a specific exception.
Separation from your employer is the most common trigger. Many plans require the entire outstanding balance to be repaid when you leave. If you cannot repay, the remainder becomes a distribution. You can avoid the immediate tax by rolling over an amount equal to the unpaid balance into an IRA or another eligible retirement plan by the due date (including extensions) for filing your federal tax return for the year the distribution occurs.
Transamerica reports deemed distributions on Form 1099-R, so the IRS receives the information whether you report it or not.