Policy Loan
Definition of "Policy loan"
Amount that the owner of a life insurance policy can borrow at interest from the insurer, up to the cash surrender value. If interest is not paid when due, it is deducted from any remaining cash value. When the cash value is exhausted, the insurance ceases. If the insured dies, any outstanding policy loan and interest due are subtracted from the death benefit. The policy owner may repay the loan in whole or in part at any time; or may continue the loan, as long as the interest plus the principal of the loan do not equal or exceed the cash value (in essence only the interest on the loan must be serviced) or until the policy matures. Insurance companies reserve the right to delay payment of a policy loan for up to six months to protect their solvency, but this has rarely been done since the Depression of the 1930s.
Popular Insurance Terms
Qualified retirement plan under the internal revenue code Section 457 for employees of the states and political subdivisions within the states. ...
Coverage in the event an insured's negligent acts and/or omissions involving the construction of a new one- or two-family residential structure result in bodily injury and/or property ...
Policy used to provide the funds necessary for buy-and-sell agreements whereby an income payment or a series of income payments are paid to the buyer of the disabled partner's interest ...
Amount subtracted from an annuity or from mutual fund proceeds payable to an annuity owner or mutual fund owner to reflect expense fees described in the annuity contract or mutual fund ...
Factor considered in determining amount of life insurance to purchase in order that funds will be available to pay the emergency expenses following the death of a family member. ...
Pension plan format. After deciding how much to contribute, the employer can suspend, reduce, or discontinue contributions during the first 10 years only for reasons of business necessity; ...
Commission that is paid based on how profitable a particular type of business proves to be that is written by an agent. ...
Contractor's and Architect's Errors and Omissions Insurance, which also serves as a general liability policy for these professionals. ...
Attributes of a particular employee benefit plan. For example, a general characteristic of group life insurance is that the whole group is underwritten, not individual members. ...
Have a question or comment?
We're here to help.