Which life insurance policy is eligible to include an automatic premium loan provision?

The automatic premium loan provision is typically associated with whole life insurance policies. This provision allows the insurer to automatically take a loan against the cash value of the policy to cover a missed premium payment, thereby preventing the policy from lapsing. Whole life policies build cash value over time, which makes it possible to secure loans against that value.

In contrast, term life insurance does not have a cash value component since it only provides coverage for a specific period of time. Universal life insurance also has flexibility in payments but operates differently and does not always include the same features as whole life policies. Variable life insurance has a cash value component as well, but the cash value can fluctuate based on the performance of the investment options selected within the policy, and it does not typically come with an automatic premium loan feature like that of whole life insurance. This design is what makes whole life policies unique in allowing for an automatic premium loan provision.