Pennsylvania Life and Health Insurance Exam Practice Question
What does the automatic premium loan provision do?
Correct Answer: B
Rationale: The automatic premium loan provision allows a policy loan to be taken out to cover overdue premiums, ensuring that the policy remains in force even if payments are missed.
Option A is incorrect as it suggests termination of the policy, which the provision specifically aims to prevent. Option C misrepresents the provision, as it does not relate to waiving premiums for disability but rather to borrowing against the policy’s cash value. Option D is also wrong because the provision does not extend coverage but rather helps maintain it by using borrowed funds to pay premiums.
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