Under the policy loan repayment dividend option, the insurer applies policy dividends toward the repayment of an outstanding policy loan. The amount of the pol¬icy dividend usually is applied first to repay any outstanding interest on the loan and then to repay the loan principal. If the amount of the annual policy dividend exceeds the amount of the policy loan and any outstanding interest, the policy¬owner can select another dividend option to receive the remainder of the dividend, or the insurer will apply the automatic dividend option.