Which of the following statements is true regarding an automatic premium loan provision?

Question

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An automatic premium loan provision is designed to prevent a policy from lapsing due to nonpayment of premium. If the premium payment is not made when due, the insurance company can automatically borrow the outstanding premium amount from the policy's cash value to keep the policy in effect. The loan is charged with interest, which must be paid in regular intervals to avoid the policy being surrendered or lapsing. The insured does not need to show evidence of insurability to resume making regular premium payments. A regular policy loan must be repaid with interest; however, an automatic premium loan is not forgiven if the insured dies before the loan is repaid.

Which of the Following Statements Is True Regarding an Automatic