Life Concepts, 19th Edition Online Certification Exam

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Question #27 of 60

An automatic premium loan provision is commonly found in cash value life insurance policies and allows:

A. The insurer to use available cash value to pay any premium unpaid at the end of the grace period.

B. The insurer to automatically use a portion of each premium payment to reduce an outstanding policy loan or loan.

C. The insured to direct the insurer to use his automatic premium payments to pay other personal loans of the insured.

D. The insured to automatically borrow cash value from one policy to pay the premium on another policy if the two policies are held by the same insurer.

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Answer :

Final answer:

An automatic premium loan provision in life insurance policies allows the insurer to use available cash value to pay unpaid premiums.


Explanation:

An automatic premium loan provision in cash value life insurance policies allows the insurer to use available cash value to pay any premium unpaid at the end of the grace period.


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