Life Insurance Policy Provisions, Options, and Riders
What does the automatic premium loan provision do at the end of the grace period?
Answer and explanation
Answer: B. The provision advances the overdue premium as a loan against the cash value, so the policy stays in force and no lapse occurs. Extended term is a nonforfeiture option, and neither a reduction in face amount nor a suspension of cover is what the clause does.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, automatic premium loan
More life insurance policy provisions, options, and riders questions
- A beneficiary elects a fixed period of ten years and dies in year six. What becomes of the remaining instalments?
- A beneficiary receiving instalments under a spendthrift clause offers those future payments as security for a loan. What is the position?
- A child covered by a children's term rider reaches the age at which the cover ends. What is normally available?
- A cost of living rider is attached to a life policy. What does it do as an inflation index rises?
- A dividend declared happens to exceed the premium next falling due under this option. What ordinarily follows?
- A New York beneficiary asks the insurer to stop the owner from changing the designation. What is the position?
621 New York questions like this one.
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