LLQP (Life Licence Qualification Program) Practice Exam · Question
What is the primary function of the Automatic Premium Loan (APL) provision in a whole life policy?
The Automatic Premium Loan (APL) provision prevents a policy from lapsing if a premium is missed by automatically taking a loan against the policy's cash value
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Question: What is the primary function of the Automatic Premium Loan (APL) provision in a whole life policy?
Answer options:
- Reducing the death benefit to keep the policy in force. ✅ Using the policy's cash value to pay an overdue premium at the end of the grace period.
- Allowing the policyowner to skip a year of premiums without interest.
- Converting the policy into an extended term insurance plan.
Correct answer: Using the policy's cash value to pay an overdue premium at the end of the grace period.
Explanation: The Automatic Premium Loan (APL) provision prevents a policy from lapsing if a premium is missed by automatically taking a loan against the policy's cash value to pay the overdue premium.
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- A life insurance policy that offers lifelong coverage, a guaranteed death benefit, and a savings component tha
- Group benefits in Canada commonly include:
- Sarah, a 35-year-old marketing professional in Ontario, purchases a participating whole life insurance policy
- Mark, a 45-year-old business owner in British Columbia, has a Universal Life policy with a Level Cost of Insur
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