What is the provision in which an amount equal to the premium due is subtracted from the cash value to prevent a lapse?

The provision where an amount equal to the premium due is subtracted from the cash value to prevent a lapse is known as the automatic premium loan. This mechanism allows policyholders to maintain their insurance coverage even if they are unable to pay the premium directly. When a premium payment is missed, the insurer can automatically borrow against the cash value of the policy to cover the owed premium.

This is particularly beneficial for policyholders as it helps avoid policy lapse, ensuring that they do not lose their coverage during times when they might be financially strained. The cash value of the policy acts as a safety net, allowing the insured to maintain their benefits without having to make an out-of-pocket payment when it's most challenging to do so. While it creates a loan against the cash value, it prevents the policy from becoming inactive due to non-payment, keeping the insurance coverage intact.

Other options like a policy loan refer specifically to borrowing against the cash value without the automatic features, while cash surrender pertains to cashing out the entire policy, thus terminating it. The premium payment option typically refers to different ways a premium can be paid but doesn't specifically describe the mechanism of using cash value to cover missed premiums.