Final answer:
A policy owner of whole life insurance who doesn't want to continue paying premiums may opt for a life insurance policy loan, which allows borrowing against the cash value, potentially getting more than the cash surrender value. The loan amount involves interest and must be repaid to avoid reducing the death benefit.
Step-by-step explanation:
The student is asking about a provision in a whole life insurance policy that allows the policy owner to stop paying premiums and still receive value from their policy. If a policy owner no longer wishes to continue making premium payments on their policy, they may have a few options depending on the specifics of their policy.
One common feature of whole life insurance policies is the cash surrender value, which is the cash amount offered to the policyholder by the insurer upon cancellation of the contract. However, the question mentions 'calling the policy for more than its cash value,' which implies the use of a life insurance policy loan. This loan allows the policy owner to borrow against the cash value of their policy.
The amount they can borrow could be more than the available cash value because loans may include future dividends or additional amounts based on the policy's provisions. A policy loan must be repaid with interest; if it is not repaid, the outstanding amount will be deducted from the death benefit.