policy loan

policy loan definition - business

policy loan

A loan to a life insurance policyholder by an insurance company that uses the cash value of the policy as security. The debt does not have to be repaid, but if the policyholder should die, the amount of the loan, plus any accrued interest, will be deducted from the amount paid to beneficiaries.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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