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Chap 12-10
Section 10
7
Finance
Undergraduate 4
10/27/2011

Additional Finance Flashcards

 


 

Cards

Term
the major advtg of a policy loan is the relatively low rate of
Definition
interest that is paid
Term
the low policy loan rates of 5, 6, or 8% are substantially lower than
Definition
credit card rates
Term
there is not credit check on the policy owner's ability to repay the loan; there is no fixed repayment schedule; and the policy owner has complete financial flexibility in determining the amt and frequency of loan repayments
Definition
advtgs of policy loans
Term
the major disadvtg of policy loans is that the policy owner is not legally required to
Definition
pay back the loan
Term
the policy could lapse if the total indebtedness exceeds the available cash value
Definition
policy loans
Term
rather than repay the loan, may let the policy lapse or may surrender the policy for any remaining cash value
Definition
policy owner
Term
a disadvtg of policy loans is that if the loan has not been repaid by the time the policy matures, the face amt of insurance is reduced by the
Definition
amt owed
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