Loans in Permanent Insurance Policies

These flashcards cover key concepts related to loans in permanent insurance policies, highlighting the differences between policy types and loan features.

Policy Loans

Loans available from permanent insurance policies that accumulate cash values.

Cash Value

The accumulated value in a permanent insurance policy that allows policy loans.

Term Insurance

A type of insurance that offers pure protection without cash value accumulation.

Whole Life Policy

A type of permanent insurance that provides coverage and cash value, allowing maximum loans equal to the cash value.

Universal Policy

A permanent life insurance policy that allows partial surrenders and loans against cash value.

Variable Policy

A permanent insurance policy that offers cash value and investment options.

Automatic Premium Loan

A feature that prevents the policy from lapsing by using cash value to pay overdue premiums.

Partial Surrender

The process of withdrawing a portion of the cash value from a universal life policy.

Death Benefit

The amount paid to beneficiaries upon the insured's death, which may be reduced by outstanding loans.

Interest on Loans

The small amount of interest that accrues on policy loans, which is not required to be paid back during the insured's lifetime.