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 to cover overdue premiums, ensuring the policy remains in force even if the premium is not paid on time.
Option A is incorrect as it suggests termination of the policy, which the provision specifically prevents. Option C is not applicable, as waiving premiums due to disability is typically covered by a separate rider, not this provision. Option D misrepresents the function, as the provision does not extend coverage but rather ensures continuity by using borrowed funds to pay premiums.
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