Automatic premium loan clause

Automatic premium loan clause,

Definition of Automatic premium loan clause:

  1. Provision in some life insurance policies under which (if the due premium remains unpaid after the end of grace period) an automatic loan from the policys cash surrender value is advanced to cover the premium. This clause prevents lapse of policy due to an accident, illness, or inadvertence.

Meaning of Automatic premium loan clause & Automatic premium loan clause Definition