Which of the following statements about life insurance policy loans is true?

Question

Quizplus · Accepted Answer

Life insurance policy loans require the policyholder to pay interest on the loan amount, which is added to the outstanding loan balance. The interest rate on the loan is determined by the insurance company and specified in the policy. The loan must be repaid with interest, and failure to repay the loan may lead to a reduction in the policy's death benefit or policy cancellation. The policyholder can use the loan amount for any purpose, and the loan is not forgiven if the insured dies before repayment.

Which of the Following Statements About Life Insurance Policy Loans