All of the Following Statements About the Automatic Premium Loan

question 20

Multiple Choice

All of the following statements about the automatic premium loan provision in a life insurance policy are true EXCEPT

• A)Its purpose is to prevent a policy from lapsing because of nonpayment of premium.
• B)The premium loan requires interest to be paid at a stated contractual rate.
• C)If the provision is used,the insured must show evidence of insurability to resume regular premium payments.
• D)The policy proceeds will be reduced if the premium loans are not repaid by the time of death.

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Definitions:

Marshall Plan

An American initiative passed in 1948 to aid Western Europe, in which over $12 billion was given to help rebuild Western European economies after the end of World War II.

Stalin

Joseph Stalin was the dictator of the Soviet Union from the late 1920s until his death in 1953, known for his totalitarian regime, the implementation of the Five-Year Plans, the Great Purge, and his role in World War II.

European Union

A political and economic union of 27 European countries that are tied by a single market, common trade policy, and others, aiming for cooperation in various domains.

Economic Powers

Nations or entities that hold significant influence on global economic systems, often through their large economies, financial resources, and strategic trade relationships.