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

The Automatic Premium Loan provision is designed to ensure that a policyholder does not unintentionally let their policy lapse due to non-payment of premiums. When premiums are not paid, this provision allows the insurer to automatically transfer funds from the cash value of the policy to cover the missed premium payment. This mechanism keeps the policy inforce even if premium payments are missed.

If the policy has no cash value or the cash value is insufficient to cover the premium, then the Automatic Premium Loan provision cannot function, and the policy may lapse. This makes it a vital component for maintaining coverage in situations where the policyholder might forget or be unable to pay a premium on time.

The other options, such as Guaranteed Insurability, Settlement Options, and Reinstatement Provision, relate to different aspects of the policy and do not directly pertain to the continuation of the policy due to premium payments. For instance, Guaranteed Insurability allows for future purchases of coverage without health evidence, and Settlement Options dictate how benefits are paid upon the insured's death. The Reinstatement Provision, meanwhile, allows a policyholder to restore coverage after it has lapsed, but it does not involve automatic management of unpaid premiums.