Policy loan amount refers to the portion of accumulated account value in a life insurance policy that a policy owner can borrow against. These loans are attractive to policy owners because interest rates are typically lower than bank rates.

The amount of the policy loan is deducted from the death benefit of the policy until it is repaid. Interest on the loan amount will accrue on a regular basis according to the contracted process of the life insurance company, which may be monthly, quarterly, semi-annually, or annually.

It's important to note that if the policy owner is unable to repay the loan, it will reduce the death benefit and may even cause the policy to lapse if the outstanding loan balance becomes too large. Therefore, policy owners should carefully consider the potential long-term impact of taking out a policy loan before making a decision.

Sell Your Life Insurance policy