LLQP (Life Licence Qualification Program) Practice Exam · Question
Under the 'Automatic Premium Loan' provision, what happens if a policyowner fails to pay a premium by the end of the grace period?
Under the 'Automatic Premium Loan' (APL) provision, if a premium is not paid by the end of the grace period, the insurer automatically takes a loan against the
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Question: Under the 'Automatic Premium Loan' provision, what happens if a policyowner fails to pay a premium by the end of the grace period?
Answer options:
- The policy is surrendered for its cash value.
- The policy is converted to an extended term insurance. ✅ The premium is paid via a loan against the policy's cash value.
- The policy enters a 'premium holiday' and the death benefit is reduced.
Correct answer: The premium is paid via a loan against the policy's cash value.
Explanation: Under the 'Automatic Premium Loan' (APL) provision, if a premium is not paid by the end of the grace period, the insurer automatically takes a loan against the policy's cash value to pay the premium, preventing the policy from lapsing.
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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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