Disclosures

Cove is a consumer credit platform for permanent life insurance policy owners. Information shown across trycove.co is illustrative until you submit your specific carrier and policy details. The disclosures below cover Reg Z, NAIC advertising guidance, state licensing, tax considerations, lapse risk, and the Direct Recognition adjustment that underlies our pricing comparison.

1. Truth in Lending Act (Reg Z) disclosures

• Cove’s policy-loan product carries an APR in the 5–8% range, depending on carrier, policy type, and Direct Recognition status.
• The specific APR and fee schedule applicable to your account will be disclosed in the loan agreement before any draw.
• No origination fee. No application fee.
• Interest payments are required at least annually; principal repayment is flexible.

2. NAIC advertising disclosures

• Cove is not an insurance company and does not sell insurance.
• Information about specific carrier policy loan rates is based on publicly available carrier disclosures. We are not affiliated with the carriers named.
• Carrier rate examples are illustrative and may not reflect the rate applicable to your specific policy. Confirm rates with your carrier or policy contract before taking action.

3. State licensing

State licenses are pending. Specific state availability will be listed at trycove.co at launch.

4. Direct Recognition (DR) and our comparison claim

• The claim “Cove can save you 1–1.5% per year on Direct Recognition whole life policies” is based on the difference between the carrier’s effective cost (stated loan rate plus the dividend reduction on the loaned portion of cash value) and Cove’s rate.
• This savings applies only to Direct Recognition carriers — Northwestern Mutual, MassMutual fixed-rate, Guardian, Penn Mutual years 1–10.
• On Non-Direct Recognition carriers — New York Life, MassMutual adjustable, Penn Mutual year 11 onward — Cove’s rate is similar to the carrier-direct rate. We are transparent about this in the home page carrier rate guidance and in our ad copy.
• The carrier-by-carrier source citations are at trycove.co/sources.

5. Tax considerations

• A policy loan against a permanent life insurance policy is not income to the IRS as long as the loan stays outstanding and the policy stays in force.
• If the policy lapses with a loan outstanding, the loan balance is treated as a distribution and the gain portion may become ordinary income.
• If your policy is classified as a Modified Endowment Contract (MEC), loans count as taxable distributions to the extent of gain. A 10% early-withdrawal penalty may apply if you are under 59½.
• Cove does not provide tax advice. Consult a licensed tax advisor.

6. Lapse risk

• If the loan balance approaches the cash value, the policy is at risk of lapse if interest is not paid.
• Cove surfaces lapse risk indicators when you submit your policy. We also send notifications when the loan-to-cash-value ratio crosses 80%.

7. Carrier name use

We name specific carriers (Northwestern Mutual, MassMutual, Guardian, Penn Mutual, New York Life) in editorial content and ads for comparison purposes under fair use. We are not affiliated with any of these carriers. We do not use carrier logos or imply endorsement.

8. Source citations

All carrier rate data and comparison claims are sourced from publicly available carrier disclosures, SEC filings, and industry case studies. The full source list is at trycove.co/sources.

9. Contact

Compliance questions: compliance@trycove.co.