What repayment method is specified in the terms for policy loans?

The correct answer is based on the fact that a policy loan allows the policyholder to borrow against the cash value of their life insurance policy. Generally, the terms for repaying these loans are tied to the premium payments, particularly with respect to how the loan is structured.

In many cases, the repayment associated with policy loans specifies a method where the outstanding amount can be settled through future premium payments. This approach effectively allows the policyholder to handle their repayment more flexibly, as they can opt to reinstate their loans by using the premiums they would normally pay. Therefore, designating this as a "premium loan repayment option" aligns with how many life insurance policies are structured.

While the other repayment methods listed may have their own contexts, they do not directly pertain to the conventional terms specific to life insurance policy loans. The nature of policy loans ties closely to premium payment structures, making the premium loan repayment option the most relevant and common method specified in such terms.