New York State Life Insurance Exam Questions Practice Question
Which of the following is a whole life policy option that allows for a delinquent premium to be paid automatically by a new policy loan?
Correct Answer: C
Rationale: The Automatic Premium Loan Option enables policyholders to cover missed premium payments through a loan against the policy's cash value, ensuring the policy remains active.
Option A, Term Rider, refers to an additional coverage that provides temporary life insurance but does not address premium payment issues. Option B, Fixed-period Installments, pertains to how death benefits are paid out and does not relate to premium payments. Option D, Spendthrift Clause, protects beneficiaries from creditors but does not involve premium payment mechanisms. Thus, only the Automatic Premium Loan Option directly facilitates the payment of delinquent premiums.
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