Automatic Premium Loan (APL) in burial life insurance for seniors
Automatic Premium Loan (APL) is a feature available in some burial life insurance policies for seniors. This feature allows the policy to automatically borrow against the policy’s cash value to pay the premium if the policyholder misses a payment.
Here are some key things to know about Automatic Premium Loans (APL) in burial life insurance for seniors:
- How it works: If the policyholder misses a premium payment, the APL feature automatically borrows against the policy’s cash value to cover the missed payment. The policyholder does not need to activate this feature.
- Interest: The borrowed amount will accrue interest, which will be added to the outstanding balance. APL interest rates are typically higher than the policy’s interest rate.
- Repayment: The borrowed amount and any accrued interest will need to be repaid by the policyholder at some point. If the policyholder does not repay the borrowed amount, it will be deducted from the death benefit paid to the beneficiaries.
- Benefits: APL can be an advantageous feature for seniors who may have difficulty keeping up with premium payments, as it can help ensure policy validity. However, it’s important to carefully consider the costs and benefits of APL and other features when choosing a burial life insurance policy.
When considering burial life insurance policies with APL, it’s important to read the policy terms and conditions carefully to fully understand how the feature works. This includes any fees or penalties that may apply. An experienced insurance professional can help you evaluate your options and find the appropriate policy for your needs and budget.