Owner's Rights
The bundle of rights belonging to the policyowner: name and change beneficiaries, borrow, assign, surrender, select settlement and dividend options, and choose nonforfeiture benefits.
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Practice This Concept
A policyowner borrows money from a life insurer using the policy as security. The loan is secured by:
The policy's cash value — A policy loan is a loan made by the insurer to the policyowner, secured by the policy's cash value. The loan accrues interest, and if it is not repaid, the outstanding balance plus interest is deducted from the death benefit or cash value upon surrender. Policy loans are available because the owner has a cash value interest in the policy. Access to loans is one of the owner's rights; because the loan is secured by the cash value, no collateral or credit check is required, and there is no personal liability beyond the cash value.
National insurance concept
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