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
Time period in health insurance that must elapse between a previous illness and a current one, if the current one is to be considered a separate illness eligible for a new set of benefits. ...
Cancellation of a policy by an insurance company. ...
Process under which terminally ill people sell their life insurance policy for value thereby excluding the policy from being subject to the transfer for value under the three-year rule. ...
Single policy covering all insurable property of specified type s) at all locations of an insured business. The form is appropriate for the business that has several locations. There are ...
Insurance salesperson who contacts potential customers and handles clerical responsibilities but has no authority to make insurance contracts. ...
Premium paid by an insured business to an insurance company from which the company subtracts charges for the cost of putting a policy on its books, premium taxes, and profit. The remainder ...
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. ...
Liability insurance coverage, primarily for shipyards for ocean marine risks, provided in much the same manner as umbrella liability insurance for nonmarine risks. Coverages may be provided ...
Independent, nonprofit, membership medical-surgical plan. Benefits cover expenses associated with medical and surgical procedures. The physician and/or surgeon bills the Blue Shield plan ...
Have a question or comment?
We're here to help.