QuestionsQuestions (GSIS Resolution NO. 179)
Under the resolution, APL is a feature of certain GSIS life insurance policies that keeps the policy in force when premiums are not paid by borrowing against the policy’s unrestricted cash value (CV) or termination value (TV) to pay the overdue premium (after the due date and grace period).
APL application ceases when the accumulated cash value/termination value becomes insufficient to cover both the APL and the existing policy loan balances.
The guidelines cover: (1) Life Endowment Policy (LEP), (2) Enhanced Life Policy (ELP), and (3) Optional Additional and the Unlimited Optional Life Insurance (UOLI) policies.
It is the remaining portion of the CV/TV after deducting the total indebtedness—i.e., the outstanding balances of existing policy loan and APL.
APL is applied only if: (1) there is an unpaid premium after the grace period; and (2) the policy has earned enough CV/TV to cover the unpaid premium(s), even partially, plus the policy loan and corresponding interests.
APL is applied in the amount of the unpaid premium (or a fraction thereof), after accounting for the monthly retirement premium deduction.
For LEP and ELP: 6% per annum compounded monthly (or 0.5% per month compounded monthly). For Optional Additional and UOLI: 8% per annum compounded annually (or 0.64% per month compounded monthly), or the rate indicated in the policy contract.
A fraction of a month is considered as one full month for APL interest computation.
No. The interest rate charged on the APL of a policyholder is independent of the interest charged on the agency for delayed remittances.
APL Balance (Current Month) = APL Balance (Previous Month) + Interest Due on APL Balance (Previous Month) + Unpaid Premium Due for the Current Month (full or partial).
APL may be settled through: (1) agency remittance; or (2) deduction from the life insurance claim, provided the policy is still in force.
A policy is considered lapsed when the combined outstanding balances of its APL and policy loan exceed the CV/TV (for LEP/ELP as specified in the guidelines).
Upon lapse, the regular/optional policy loan (if any) and the APL are deemed paid using the accumulated CV/TV, and the corresponding loan accounts are closed.
The amount paid is applied to other existing loan(s) of the member, or refunded subject to the rules on the processing of overpayments.
A lapsed ELP for an active member is given a 60-day grace period to pay premiums. If the member dies during the grace period, death benefits are paid less unpaid premiums and outstanding GSIS obligations. Upon payment/remittance of premiums, the ELP is automatically reinstated on the date the premiums are paid and remitted, effective at the beginning of the due month covered by the payment.
If the member is still in active service, an ELP is issued upon receipt of the first premium under the new coverage.
A compulsory life insurance policy is automatically considered lapsed after 12 consecutive months of non-payment of premiums, even if there is still a balance in the cash or termination value.