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From The Glossary »

Policy Loan:

A loan made by a life office to a policyholder on the security of the surrender value of his or her policy. In cases where a policyowner forgets, or neglects, to pay one or more premiums on a life policy which has a surrender value, the company will, depending on the policy terms, ‘advance’ the unpaid premium and create a non-forfeiture loan.
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