Mumbai, March 21 -- Traditional insurance policies have a fixed maturity period. Until these policies mature, policyholders cannot withdraw funds.

However, if you are facing a temporary cash crunch and don't want to surrender your policy, a loan against it can be an option. Here is a look at how it works and why policyholders must be careful when opting for it.

A loan can be taken against traditional policies like money back, endowment, or whole-life policies, which offer a surrender value. 
"As soon as the policies acquire surrender value, they are eligible for policy loans. While insurers can't offer loans against unit-linked insurance plans (ULIPs) as per regulations, lenders do offer loans against ULIPs, including some who off...