Under this provision, according to Mass Mutual, if any premium payment is not made by the end of the grace period, the amount due will automatically become a loan against the cash value of the policy, provided there is sufficient value in the policy.

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This additional savings receives certain tax privileges and allows policy owners to take loans against or distributions from that cash value.

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If the policy is more than 20 years old, it's almost certainly a whole life policy, meaning it builds up cash value and can be borrowed against. (This is what reeled in your parents.)Another popular variation was the endowment policy, which pays face value at a specified age, such as 65.

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