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Chapter 3

Life Insurance Policy Riders, Provisions, Options, and Exclusions

QuestionAnswer
Which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium? Automatic premium loan
An individual is purchasing a permanent life insurance policy with a face value of $25k. this is all that he can afford , he wants to be sure that additional coverage will be available in the future. Which options should be included in the policy? Guaranteed insurability option
Which provision of a life insurance policy states the insurer's duty to pay benefits upon the death of the insured, and to whom the benefits will be paid? Insuring clause
When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount? Equal to the original policy for as long as the cash values will purchase.
An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries? The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive.
An insured will be allowed to reactivate her lapsed life insurance policy if action is taken within a certain period of time, and proof of insurability is provided. Which policy provision allows this? Reinstatement provision
The validity of coverage under a life insurance policy may not be contested, except for nonpayment of premium, after the policy has been in force for at least how many years? 2 years
Which of the following best describes fixed-period settlement option? Both the principal and interest will be liquidated over a selected period of time.
Nonforfeiture values guarantee which of the following for the policyowner? That the cash value will not be lost
All of the following are Nonforfeiture options EXCEPT Interest only
Which option is being utilized when the insurer accumulates dividends at interest and then uses the accumulated dividends, plus interest, and the policy cash value to pay the policy up early? Paid-up option
All of the following are dividend options EXCEPT Fixed-period installments.
The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the po Interest only option
An insured receives an annual life insurance dividend check. What term best describes this arrangement? Cash option
When a life insurance policy was issued policyowner designated a primary n a cont beneficiary. years later, insured n the primary beneficiary died in the same car accident. it was impossible to determine who died first. Which would receive death benefit The insured's contingent beneficiary
Which two terms are associated directly with the premium? Level or flexible
All of the following are true regarding insurance policy loans EXCEPT Policy loans can be made on policies that do not accumulate cash value.
Under an extended term nonforfeiture option, the policy cash value is converted to The same face amount as in the whole life policy.
A policyowner fails to pay the premium due on his whole life policy after the grace period passes, but the policy remains in force. This is due to what provision? Automatic premium loan
Created by: Hayley92
 

 



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