Which term describes the cash value available when borrowing against a life insurance policy?

The term that describes the cash value available when borrowing against a life insurance policy is "loan value." This refers to the amount that a policyholder can borrow from the insurer using the policy's cash value as collateral. Life insurance policies, particularly whole life or universal life policies, accumulate cash value over time, and policyholders have the option to take loans against this cash value. The loan does not require repayment in the conventional sense; instead, if the loan is not paid back, the outstanding amount, including any interest, will be deducted from the death benefit when the insured passes away.

Other options such as extended term insurance, accumulated dividends, and paid-up additions relate to different aspects of life insurance policy features. Extended term insurance is a non-forfeiture option that allows the policyholder to convert the policy's cash value into term insurance coverage. Accumulated dividends refer to the share of profits a participating whole life policyholder receives, which can be used to purchase additional insurance or accumulate interest. Paid-up additions are small amounts of whole life insurance that can be purchased with cash value or dividends, increasing the policy's death benefit. While all these terms are important in understanding life insurance policies, "loan value" specifically pertains to the borrowable cash amount