How is a policy loan different from a commercial loan?

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

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

C. Both A & B

D. None of the three

Answer: Option C

Solution(By Examveda Team)

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.