meaning of automatic premium loan clause

automatic premium loan clause meaning in Law Dictionary

whenever an loan predicated on cash surrender worth is removed to pay for life insurance policies premuims. It prevents reduction and past due condition.

automatic premium loan clause meaning in Business Dictionary

Provision in some life insurance guidelines under which (if because of premium remains delinquent following the end of grace duration) an automatic loan through the policy's 'cash surrender worth' is advanced level to pay for the advanced. This term prevents lapse of policy considering a major accident, disease, or inadvertence.