Nonforfeiture (LTC)

Uses the policy's cash value to pay an overdue premium automatically, preventing a lapse — The automatic premium loan provision authorizes the insurer to automatically pay a premium from the policy's cash value when the premium is not paid within the grace period, keeping the policy in force. The amount advanced becomes a loan against the cash value and accrues interest. This prevents an unintended lapse when the owner forgets to pay or temporarily cannot pay. If the cash value is insufficient to cover the premium, the policy may still lapse. APL is usually elected in the application or by a later written request from the policyowner, so it reflects the owner's choice to use accumulated values for continuity.

National insurance concept

The insurer will automatically borrow against the cash value to pay the premium and keep the policy in force — The automatic premium loan (APL) provision authorizes the insurer to pay an unpaid premium by borrowing from the policy's cash value, preventing an unintended lapse. The loan is secured by the cash value and accrues interest; if not repaid, the loan plus interest is deducted from the death benefit or cash value at surrender. APL is a nonforfeiture-related convenience, not a conversion of coverage. It operates only while sufficient cash value exists; if the cash value cannot cover the premium, the policy may still lapse.

National insurance concept