Which life insurance provision allows an insured to borrow against the cash value of their policy?

The provision that allows an insured individual to borrow against the cash value of their life insurance policy is known as the loan provision. This feature is particularly advantageous for policyholders because it enables them to access funds in times of need while still maintaining their coverage. The amount that can be borrowed is typically limited to a percentage of the cash value accumulated in the policy, and the borrowed funds usually come with interest.

This borrowing does not require the insured to undergo a credit check as it is based on the policy's cash value, meaning it's generally easier to access than traditional loans. Additionally, if the loan is not repaid, the amount owed will be deducted from the death benefit, reducing the amount available to beneficiaries.

The other provisions mentioned, such as the withdrawal provision, refer to different aspects of accessing cash value, but they work in a way distinct from borrowing. The payment provision pertains to the way premiums are paid, while the cash surrender provision involves liquidating the policy entirely for its cash value, thereby ending coverage. Each serves its unique purpose, but the loan provision specifically addresses borrowing against accumulated cash value.