Automatic Premium Loan Provision is an insurance provision that allows a policyholder to borrow an amount of money to pay their premiums for the life or health insurance policy. This loan will be paid off with interest at the time of death or maturity, whichever comes first. It is important for policyholders and beneficiaries to understand what this provision entails and how it works.
Table Of Content:
- Automatic Premium Loan Definition
- Automatic Premium Loan - Overview, How To Obtain, Example
- OCI State Life Insurance Fund Glossary of Terms
- Automatic Premium Loan | Insurance Glossary Definition | IRMI.com
- Section 46:30B-25 - Effect of automatic premium loan provision or ...
- What is an Automatic Premium Loan Provision? - Definition from ...
- What Are Life Insurance Non-forfeiture Options? | American Income ...
- Texas Administrative Code
- What Is an Automatic Premium Loan Provision? | Life Benefits
- RCW 63.29.070: Funds owing under life insurance policies. (
1. Automatic Premium Loan Definition
https://www.investopedia.com/terms/a/automatic-premium-loan.asp
An automatic premium loan (APL) is an insurance policy provision that allows the insurer to deduct the amount of an outstanding premium from the value of ...
2. Automatic Premium Loan - Overview, How To Obtain, Example
https://corporatefinanceinstitute.com/resources/knowledge/other/automatic-premium-loan/
Jan 26, 2023 ... An automatic premium loan is a provision in a life insurance policy that allows the insurer to automatically deduct the premium amount ...
3. OCI State Life Insurance Fund Glossary of Terms
https://oci.wi.gov/Pages/Funds/SLIFGlossary.aspx
Aug 16, 2021 ... Automatic Premium Loan: A provision in a life insurance policy that any premium not paid by the end of the grace period (usually 31 days) is ...
4. Automatic Premium Loan | Insurance Glossary Definition | IRMI.com
https://www.irmi.com/term/insurance-definitions/automatic-premium-loan
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 ...
5. Section 46:30B-25 - Effect of automatic premium loan provision or ...
https://law.justia.com/codes/new-jersey/2013/title-46/section-46-30b-25
Effect of automatic premium loan provision or nonforfeiture provision upon maturity or termination of insurance policy. For purposes of this article, ...
6. What is an Automatic Premium Loan Provision? - Definition from ...
https://www.insuranceopedia.com/definition/886/automatic-premium-loan-provision
An automatic premium loan provision is a clause in a whole life insurance policy. It states that should a policyholder fail to make a scheduled premium ...
7. What Are Life Insurance Non-forfeiture Options? | American Income ...
https://www.ailife.com/articles/what-are-life-insurance-non-forfeiture-options.html
Feb 10, 2021 ... An automatic premium loan is a provision in a life insurance policy with a cash value that allows the insurer to automatically deduct the ...
8. Texas Administrative Code
https://texreg.sos.state.tx.us/public/readtac$ext.TacPage?sl=R&app=9&p_dir=&p_rloc=&p_tloc=&p_ploc=&pg=1&p_tac=&ti=28&pt=1&ch=3&rl=109
(a) Automatic premium loans do not constitute a stipulated form of insurance, and the automatic premium loan provision must not be classified as a ...
9. What Is an Automatic Premium Loan Provision? | Life Benefits
https://www.life-benefits.com/what-is-an-automatic-premium-loan-provision/
Jul 7, 2022 ... An Automatic Premium Loan (APL) Provision allows an insurance company to take a loan from the policy's cash value to cover unpaid premium. This ...
10. RCW 63.29.070: Funds owing under life insurance policies. (
https://app.leg.wa.gov/rcW/default.aspx?cite=63.29.070
... readjusted, or paid premiums on the policy, subjected the policy to a loan, ... of an automatic premium loan provision or other nonforfeiture provision ...
How does an automatic premium loan provision work?
An automatic premium loan provision allows a policyholder to borrow an amount of money from their life or health insurance policy to pay their premiums. This loan will be paid off with interest at the time of death or maturity, whichever comes first.
What are the benefits of having an automatic premium loan provision?
Benefits of having an automatic premium loan provision include avoiding lapse in coverage due to non-payment, eliminating the need for borrowing from outside sources, and increasing cash value as loans are repaid.
Are there any risks associated with relying on an automatic premium loan?
Yes, there are risks associated with using an automatic premium loan. If you don't pay your premiums on time and your policy lapses, you may end up owing more than you originally borrowed. Additionally, if your policy ends before you can repay the loan, the remaining balance will be deducted from your death benefit or surrender value.
Conclusion:
Automatic Premium Loan Provision is a useful tool for policyholders who want to avoid lapsing their life and/or health insurance policies due to lack of payment while also allowing them access to funds they would not otherwise have access too. However, it is important to understand all potential risks associated with relying on such a provision in order to make sure that both you and your beneficiaries get the best possible outcome from this arrangement.
