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• Under an insurance policy, the amount that can be borrowed at a specified rate of interest from the issuing company by the policyholder, who uses the value of the policy as collateral for the loan. In the event the policyholder dies with the debt partially or fully unpaid, the insurance company deducts the amount borrowed, plus any accumulated interest, from the amount payable.

  Alabama Department of Insurance - Cite This Source - This Definition
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  Cite Definition for Policy Loan

  American Psychological Association (APA)

  Policy Loan. (n.d.). Glossary of Life Insurance Terms. Retrieved June 10, 2023, from website: http://www.expertglossary.com/definition/policy-loan.

  Chicago Manual of Style (CMS)

  Policy Loan. www.aldoi.gov. Glossary of Life Insurance Terms. Alabama Department of Insurance. http://www.expertglossary.com/definition/policy-loan (accessed: June 10, 2023).

  Modern Language Association (MLA)

  "Policy Loan." Glossary of Life Insurance Terms. Alabama Department of Insurance. 10 June. 2023 http://www.expertglossary.com/definition/policy-loan.

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