How can a policyholder obtain money from the insurance company while remaining insured?

Taking a policy loan is a method by which a policyholder can access funds from their insurance policy without terminating the coverage. In this scenario, an insurance policy, particularly a whole life or universal life policy, accumulates cash value over time. The policyholder can borrow against this cash value while maintaining the policy's death benefit and coverage.

When a policy loan is taken, it generally does not require a credit check, and the policyholder is not obligated to repay within a specific time frame. However, it's crucial to understand that any outstanding loan balance, including interest, will reduce the death benefit if not repaid at the time of the policyholder’s passing. This option allows for immediate access to cash without losing insurance coverage, making it a beneficial choice for policyholders in need of funds.

Surrendering the policy for its cash value results in the loss of coverage, while discontinuing payments may lead to the policy lapsing. The extended insurance option also allows for coverage under certain circumstances, but it does not provide immediate funds like a policy loan does. Therefore, taking a policy loan is the best choice for maintaining insurance while obtaining funds.