Policy loan(redirected from Life Insurance 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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved