What does this mean?

I’m looking to take out a loan on my whole life policy. I signed an initial form to start the process. It indicated:

“each undersigned acknowledges receipt of this loan made under the terms of the above named policy and hereby assigns said policy the the prudential insurance company as security for said loan in full which shall bear interest from the date at the rate provided in said policy”

Then when I got the check it said: “Authorizes the policy loan in the amount of this check. Agrees that said policy loan shall be subject to the provisions of the policy. Assigns his/her policy to ________company as security for said loan and requests that the company waive any provision of the policy requiring its return as a condition to the granting of this policy.”

The company has assured me that as long as (at minimum) I continue paying the premium and the interest the policy will continue to be in effect.

The form they sent me was not a life insurance loan form from their products online. Looks like it was typed up in word. It’s a third party that apparently manages this policy for the carrier. This is a very well known company.

From what I understand about life insurance loans if something happens to you and this loan is still unpaid it will simply be deducted from payout. Does that sound like what’s happening here or does assignment to them go too far? I definitely know collateral assignments are a thing when getting a loan from a bank etc. But I also know there are different types of assignments including absolute which it seems like this is.

I haven’t actually taken the loan until I cash the check. Any help is appreciated.

submitted by /u/Routinestory8383
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