What option allows the insurer to borrow from the cash value to pay unpaid premiums after the grace period?

The Automatic Premium Loan option is a feature available in some life insurance policies that allows the insurer to automatically use the cash value of the policy to pay any overdue premiums after the grace period has expired. This ensures that the policy remains in force and prevents lapsing even if the policyholder has not made the premium payment by its due date.

When a policyholder has a cash value life insurance policy, there accumulates a cash value over time that can be borrowed against. If a premium payment is missed and not paid during the grace period, the insurer can automatically deduct the unpaid premium from the cash value, thus keeping the policy active. This feature is especially beneficial because it protects the policyholder from losing coverage due to unintentional lapses and maintains the insurance benefits without requiring immediate payment from the policyholder.

The other options do not fulfill this specific role: while the Grace Period Option allows a policyholder time to pay premiums before lapsing; the Partial Withdrawal Option allows accessing some cash value but not specifically for premium payments; and the Reinstatement Option refers to restoring a lapsed policy rather than borrowing for premium payments.