NO.. Cash surrender value of a policy CANNOT be called a loan. You are not going to repay it. In fact, the amount received in excess of the premiums paid would be subject to federal tax (depends on many factors). BUT IT IS NOT A LOAN.
I hope this helps...Warm Regards,
Would you mind clearly explaining and elaborating bit more on your question so that I can assist better ??
Let me put it in more clarified manner.
Scenario one, that you are surrendering your policy. In this case, you will receive your surrender value in cash. This is NOT a loan. If the cash surrender value that you receive is more than the premiums that you have paid for it, then it is subject to federal tax. The policy, after surrendering, shall cease to exist.
Scenario two -- When you get any credit / loan, equivalent to the surrender value of your policy, then your policy will act as collateral and this would be a loan. The policy would continue to remain in force as you will also continue to pay premiums and the policy will will act as a collateral security for the credit / loan that you have cashed out.
Depending upon two options, whether you are surrendering the policy and receiving cash (the money will NOT be a loan) OR if you are taking any cash credit / loan against your policy as collateral (this WILL be a loan) will decide if this is a loan or not.
I have tried to make it as simple as possible. Do not hesitate to get back for any further clarifications.