Multiple choice

On foreclosure of a policy, which of the following is incorrect?

  1. Nothing is payable to the policyholder.

  2. Excess amount (subsisting cash value after deducting loan/interest) is payable.

  3. Notice has to be given to the policyholder by the insurer.

  4. None of the above
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A Correct answer
Explanation

Foreclosure is a legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender, by forcing the sale of the asset used as the collateral for the loan. On foreclosure of a policy, nothing is payable to the policyholder.

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