An insured stops making payments on a loan taken from his cash value policy. What will most likely happen?

An insured stops making payments on a loan taken from his cash value policy. What will most likely happen?



a. the policy will be reduced to an extended term option.
b. the policy will terminate when the loan amount with interest equals or exceeds the cash value
c. the insurer will increase the interest rate on the loan and charge a penalty
d. the insurer will not permit the policyowner to take out any more loans


Answer: b

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