Life Insurance Basics
What is a life insurance automatic premium loan?
An automatic premium loan (APL) is a provision in a permanent life insurance policy that automatically takes a loan from the cash value to pay a premium if you miss a payment. The APL prevents the policy from lapsing due to a missed payment. Interest accrues on the loan.
Key Points
- APL: automatically takes a loan from cash value to pay missed premium
- Prevents policy from lapsing due to missed payment
- Interest accrues on the loan
- If loan exceeds cash value: policy may eventually lapse
- An independent agent can help you understand APL provisions