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Policy Loan
(redirected from Policy Loans)

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Policy loan
A loan often made at a below-market interest rate from an insurance company to a policyholder that is secured by the cash surrender value of a life insurance policy.

Policy Loan
A loan that an insurance company extends to a policyholder with the cash surrender value of the policy as collateral. That is, if the policyholder does not repay the loan, the insurance company may take an equivalent amount out of the policyholder's death benefit. The nature of collateral has historically meant that policy loans carry low interest rates, but this is not always true. It is also called a life insurance loan.


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A few insurers have 1035 rescue programs and products designed to accept large policy loans.
Options include receiving dividends in cash, or using them to reduce premiums, purchase additional insurance coverage, accumulate at interest, or repay policy loans and policy loan interest.
ABSTRACT Previous research has examined the demand for life insurance policy loans using aggregate policy loan data.
 
 
 
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