If an insured continually uses the automatic premium loan option to pay the policy premium, A. The cash value will continue to increase. B. The face amount of the policy will be reduced by the automatic premium loan amount. C. The policy will terminate when the cash value is reduced to nothing. D. The insurer will increase the premium amount.
Added by Richard S.
Close
Step 1
The question asks what happens when an insured continually uses the automatic premium loan option to pay the policy premium. Show more…
Show all steps
Your feedback will help us improve your experience
Supreeta N and 62 other Principles of Accounting educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Recommended Videos
Which non-forfeiture benefit results in a whole-life policy with coverage lower than the original policy, but the owner does not have to pay any further premiums? Select one: a. Partial surrender b. Automatic premium loan c. Extended term insurance d. Reduced paid-up insurance
Supreeta N.
Which one of the following statements is true about reduced paid-up insurance? A. It continues for 20 years. B. It buys protection with paying new premiums. C. It results in a face amount less than the original amount. D. It means the original face amount is continued for a certain number of years.
Karl Z.
Adi S.
Recommended Textbooks
Horngren’s Cost Accounting
Cost Accounting A Managerial Emphasis
Principles of Accounting Volume 1: Financial Accounting
Transcript
18,000,000+
Students on Numerade
Trusted by students at 8,000+ universities
Watch the video solution with this free unlock.
EMAIL
PASSWORD