Which of the following statements about life insurance policy loans is (are)true?
I.Interest is not required on a life insurance policy loan,as the policyholder is borrowing his or her own money.
II.If there is an outstanding loan when the insured dies,payment to the beneficiary is reduced by the amount of the loan.

Question

Quizplus · Accepted Answer

Statement I is false. Interest is indeed required on a life insurance policy loan as it is still a loan that must be paid back. Statement II is true. If there is an outstanding loan when the insured dies, the death benefit paid to the beneficiary is reduced by the amount of the loan.

Which of the Following Statements About Life Insurance Policy Loans