An automatic premium loan is a life insurance policy provision that allows the policy owner to borrow money from the policy's cash value to pay the premium. If the policy owner does not have enough cash value to pay the premium, the policy will lapse and the death benefit will not be paid. What does automatic premium loan as the non forfeiture option? An automatic premium loan is a non-forfeiture option that allows policyholders to continue their life insurance coverage even if they are unable to pay their premiums. If the policyholder misses a premium payment, the insurance company will automatically loan them the amount of the premium from the policy's cash value. The loan will accrue interest, and will reduce the death benefit and cash value of the policy.
What element of insurance contract requires payment of premium? The element of insurance contract that requires payment of premium is called the "premium clause." This clause is typically found in the section of the contract dealing with premiums and payments. It sets forth the amount of premium that must be paid, the frequency of payments, and the methods of payment.
What is APL outstanding premium?
There are two types of premiums for life insurance policies: the initial premium and the subsequent premium. The initial premium is the amount of money that the policyholder pays to purchase the policy. The subsequent premium is the amount of money that the policyholder pays each year to keep the policy in force.
The APL outstanding premium is the amount of money that the policyholder still owes on the policy's initial premium. Is a policy has an automatic premium loan provision What happens if the insured dies before the loan is paid back? If a policy has an automatic premium loan provision, the loan is typically repaid from the death benefit of the policy. If the insured dies before the loan is paid back, the remaining loan balance will be deducted from the death benefit.
Which of the following statements best describes the automatic premium loan provision? The automatic premium loan provision is a feature of some life insurance policies that allows the policyholder to borrow money from the policy's cash value to pay the premium. If the policyholder does not repay the loan, the loan will be deducted from the policy's death benefit.