Select the appropriate response:

Which of these statements is NOT true regarding a cash value loan against a life insurance policy?

A. Interest normally accrues on unpaid balances.
B. Loan cannot exceed the policy's cash value.
C. Policy contract terms dictate the interest rate.
D. Interest payments made by the policyowner are deductible.

(Note: 7 of 20 Questions Remaining)

Cash value loans against life insurance policies involve accruing interest, have limits tied to policy cash values, and specify interest rates in policy contracts.

Explanation:

Interest normally accrues on unpaid balances: One key aspect of cash value loans against a life insurance policy is that interest typically accrues on any unpaid loan balances, similar to other loan agreements.

Loan cannot exceed the policy's cash value: A crucial restriction is that the loan amount taken against the policy cannot surpass the cash value of the insurance policy itself.

Policy contract terms dictate the interest rate: The interest rate for the cash value loan is determined by the terms specified in the policy contract, providing clarity on the rate that will be applied.

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