Which provision in a permanent life insurance policy may lapse for non-payment of premium?

In permanent life insurance policies, the Automatic Premium Loan provision is designed to prevent the policy from lapsing due to non-payment of premiums. When a premium is not paid, the insurer can automatically take out a loan against the cash value of the policy to cover the unpaid premium. This ensures that the policy remains in force even when a premium is missed, as long as there is sufficient cash value available.

Understanding this provision is crucial for policyholders, as it offers a safety net to maintain coverage during financially challenging times. If a policyholder struggles to make premium payments, the Automatic Premium Loan can help avoid a lapse in coverage, allowing the policyholder to retain their life insurance protection without immediately needing to pay out of pocket.

The other options provided do not involve the mechanics of premium payments in the same way. The Guaranteed Insurability provision allows the policyholder to purchase additional insurance without undergoing medical underwriting, the Settlement Options relate to how death benefits are paid out, and the Reinstatement Provision allows a lapsed policy to be restored under certain conditions. None of these options directly address the situation of premium non-payment and its implications for policy status.