What is a automatic premium loan?
An automatic premium loan is an insurance policy provision that allows the insurer to deduct the amount of an outstanding premium from the value of the policy when the premium is due.
What is premium loan?
Premium Loan — an amount borrowed against the cash value of a life insurance policy to make a premium payment, allowing the policy to stay in force.
What is the automatic premium loan provision activated?
Automatic Premium Loan — an optional provision in life insurance that authorizes the insurer to pay from the cash value any premium due at the end of the grace period. This provision is useful in preventing inadvertent lapse of the policy.
What is the purpose of the automatic premium loan rider quizlet?
The automatic premium loan provision permits the insurer to automatically use the policy cash value to pay an overdue premium.
Which insurance has no automatic premium loan provision?
Because universal life policies will always deduct policy expenses from available cash value, they do not have an automatic premium loan feature. Whole life insurance policies will never automatically take policy cash values to pay the premium due, so the APL feature is the way to effectively accomplish this goal.
What automatic premium loan is as a non forfeiture option?
A life insurance nonforfeiture option that allows the insurer to pay overdue premiums on a policy by establishing a loan against the policy’s cash value. See also Nonforfeiture Options.
What does Nonforfeiture mean?
A nonforfeiture (sometimes hyphenated) clause is an insurance policy clause stipulating that an insured party can receive full or partial benefits or a partial refund of premiums after a lapse due to nonpayment.
How does paid up insurance work?
Paid-up additional insurance is additional whole life insurance coverage that a policyholder purchases using the policy’s dividends instead of premiums. Paid-up additions themselves then earn dividends, and the value continues to compound indefinitely over time.
How may an insurance company classify an accidental death?
A life insurance company classifies a death as accidental when it is not caused by illness, natural causes, or any exclusion. Also, the death of the insured must occur within a period of time following the accident as set forth in the policy itself.
What does Accelerated death benefit mean?
The Accelerated Death Benefit (ADB) is a provision in most life insurance policies that allows a person to receive a portion of their life insurance money early — to use while they are still living. ADB is a standard in the industry and offered by most life insurance carriers.
Under what circumstances if death occurs accidental death benefit is payable?
i) The Member has sustained any bodily injury directly and solely from the Accident; ii) The death of the Member occurs within 120 days of the date of Accident due to such injury as stated above, solely, directly and independently of all other causes of death.
When an insured dies who has first claim to the death proceeds of the insured life insurance policy?
Your life insurance policy should have both “primary” and “contingent” beneficiaries. The primary beneficiary gets the death benefits if he or she can be found after your death. Contingent beneficiaries get the death benefits if the primary beneficiary can’t be found.