3 - Life Insurance Policies - Provisions, Options and Riders Part B

B owns a whole life policy with a guaranteed insurability option that allows him to purchase, without evidence of insurability, stated amounts of

Additional whole life coverage at specified times

When does a Guaranteed insurability rider allow the insured to buy additional coverage?

At future dates specified in the contract with no evidence of insurability required

Automatic premium loan provision is designed to

Avoid a policy lapse

What does the insuring agreement in a life insurance contract establish?

And insurer's basic promise

M had an annual life insurance premium payment due January 1. She died January 10 without making the premium payment. What action will be insured or take?

Pay face amount minus the past due premium

Which of the following provisions guarantees that premiums will be waived if a Juvenile Life policyholder becomes disabled?

Payor clause

Which of these types of policies may not have the automatic premium loan provision attached to it?

Decreasing term

Which of these provisions require proof of insurability after policy has lapsed?

Reinstatement

The option that provides an additional death benefit for a limited amount of time at the lowest possible cost is called a(n)

Accidental Death and Dismemberment rider (AD&D)

Which of the following statements is correct about accelerated death benefits?

Must have a terminal illness to qualify

P died five years after purchasing a life policy. While investigating the claim, the insurer discovered material misrepresentations made by P during the application process. Which of these actions will the insured take?

Beneficiary will be paid the death benefit

A policy loan is made possible by which of these life insurance policy features?

Cash value provision

Which of these actions is taken when a policyowner uses a life insurance policy as collateral for a bank loan?

Collateral assignment

A life insurance policy which ensures that the premium will be paid if the insured becomes disabled has what kind of rider attached to it?

Waiver of premium

L takes out a life insurance policy and dies 10 years later. During the claim process, the insurer discovers that L had understated her age on the application. Under the Misstatement of Age provision, the insurer will

adjust the death benefit to a reduced amount