Multiple choice

How is a policy loan different from a commercial loan?

  1. There is no legal obligation to repay a policy loan.

  2. In case of policy loan, there is no need for a credit check.

  3. Both 1 and 2

  4. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The main advantage of a policy loan over other loans is that there is no credit check; the interest rate is usually much lower; the policyholder can pay back the loan according to virtually any repayment schedule; and, in fact, the policyholder is not even legally obligated to pay back the loan.

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