What is an automatic premium loan provision designed to do?

The automatic premium loan provision is designed to prevent a life insurance policy from lapsing due to missed premium payments. When premiums are not paid on time, this provision allows the insurer to automatically borrow from the accumulated cash value of the policy to cover the premium cost. This helps ensure that the policy remains in force and the insured continues to have coverage, even if they forget or are unable to make a payment on time. By drawing from the cash value, the insurer helps maintain the contract, thus protecting the policyholder's investment and their beneficiaries' potential benefits.

The other options do not accurately represent the function of the automatic premium loan provision. For instance, borrowing from beneficiaries or increasing the policy’s coverage would not align with the purpose of maintaining the policy's status through premium payments. Additionally, automatically paying out benefits relates to claims processes rather than financing premium obligations.