Check my policyHome / Your options / Policy loan or surrender / Loans and arrears
Three kinds of debt can build up on a life policy: loans you take out, automatic premium loans the insurer makes to cover missed premiums, and premiums still unpaid. All of them come off any surrender value, sale price or payout, and most of them grow with interest.
Last reviewed 15 October 2026
Your insurer's statement shows each one. Ask for it dated.
| Debt | How it arises | Interest? | If it keeps growing |
|---|---|---|---|
| Policy loan | You borrow against the cash value | Yes, at the insurer's rate | If loan and interest pass the cash value, the policy can end |
| Automatic premium loan | The insurer pays a missed premium by lending from the cash value | Yes, as a policy loan | Each missed premium adds to it, until the cash value runs out |
| Premium arrears | A premium is due and unpaid, often in the grace period | Usually not, unless the policy lapses and is reinstated | The policy lapses if not paid or covered by a loan |
Deducted from the surrender value. What is left is your net surrender value. Surrender value calculator
The debt stays with the policy, so the price is lower by about the same amount. Selling with a loan
Taken off the payout before it is paid to the owner or nominees.
If an automatic premium loan is quietly paying your premiums, act now: resume payments, go paid-up, or decide to sell or surrender. Left alone, it eats the cash value until the policy ends with little or nothing.
Repay an ordinary policy loan if you have spare cash and want to keep the policy; otherwise it simply comes off whatever you eventually receive. Paid-up policies
Your annual statement or the insurer's app will show a loan balance growing even though you haven't borrowed. Ask your insurer if unsure.
Usually, by resuming premiums or asking your insurer to make the policy paid-up instead. Rules vary by insurer.
Not usually. They are settled or taken off the price, the same as on a surrender.
See whether we would buy the policy before the loan grows further. No NRIC, no obligation.