South Carolina Life and Health Practice Exam

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Study for the South Carolina Life and Health Exam. Engage with flashcards and multiple choice questions; each question is outlined with hints and explanations. Prepare for your certification journey!

Practice this question and more.

The automatic premium loan provision allows an insurer to withdraw what from a policy's cash value?

Future premiums
Unpaid medical claims
Past due premiums
Administrative fees

The correct answer is: Past due premiums

The automatic premium loan provision is a feature in some life insurance policies that allows the insurer to automatically pay any unpaid premium from the policy's cash value. This provision is particularly beneficial for policyholders who may forget to make a premium payment or who find themselves in a temporary financial bind. By using the cash value to cover the past due premiums, the policyholder can keep their policy in force and avoid lapsing it. In the context of the choices provided, the correct answer refers to past due premiums. This option highlights the functionality of the automatic premium loan provision, which is designed specifically to address overdue payments by accessing the cash value of the policy. This provision helps maintain policy continuity and protects the policyholder's insurance coverage despite missed payments.