Hi I wonder if you can explain the policy loans that are mentioned in question 7 on assignment 6. I don't really understand the mechanics of how these work. Are these loans against a savings policy? Why are they reasonably secure. If the p/h has a loan what prevents them from not paying it back? Is this because the company would not loan the full value of the policy? Thank you, Rachael
Hi Rachael Yes, these are loans against a savings policy. And yes, the loan amount would be less than the full value of the policy. So they are very secure as the insurer can deduct any outstanding loan from the claim payout. Best wishes Mark
