Under the terms of a universal life insurance policy, the policyholder may withdraw an amount, which reduces the amount of the benefit payable at death and the policy cash surrender value - but the withdrawal is not referred to as a "policy loan" in the policy.
Can the withdrawal be considered a "policy loan"? CCRA responded:
Even if the withdrawal is not referred to as a "policy loan" under the terms and conditions of the policy, this does not mean that the withdrawal is not a "policy loan" … .
The definition of "policy loan" is broad enough to allow for this interpretation, as it defines "policy loan" as "an amount advanced by an insurer to a policyholder in accordance with the terms and conditions of the life insurance policy.