Which insurance policy allows for loans but does not require repayment immediately?

Whole life insurance is the correct choice because it is a type of permanent life insurance that not only provides a death benefit but also accumulates cash value over time. Policyholders can take out loans against the cash value of their whole life policy. One of the key features of these loans is that repayment is not required immediately. This means that if the borrower does not repay the loan, the amount borrowed will simply be deducted from the death benefit paid out to beneficiaries upon the policyholder's passing.

In contrast, term life insurance solely offers a death benefit for a specified period and contains no cash value component, so it does not allow for loans. Health insurance is designed to cover medical expenses and has no feature of borrowing against a policy’s value. Long-term care insurance focuses on providing coverage for long-term care services and also does not incorporate any cash value from which loans could be taken. Thus, whole life insurance stands out as the policy that offers the option for loans without immediate repayment obligations.