Question

the policy loan provision means that a. an individual can take out a loan on his term policy. b. the death benefit will be increased by the amount of an outstanding policy loan. c. the policyowner can borrow any amount up to the cash value of the policy. d. the beneficiary can borrow any amount up to the total benefit. e. no interest will accumulate for any loans related to life insurance.

Answer 1

According to the policy loan clause, the policy owner may borrow any sum up to the policy's cash value. As a result, choice (C) is the best way to respond.

What is policy loan?

A policy loan is given out by an insurance provider and is secured by the cash value of the borrower's life insurance policy. A "life insurance loan" is another name for it. They used to be renowned for having cheap interest rates, but that isn't necessarily the case now.

Even though they have limitations, policy loans typically provide easy access to money. When a universal or whole life insurance policy has built up cash value, policy loans may be taken out.

Hence, option (C) is the accurate one.

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