Ch 3 Quiz

According to the entire contract provision, what document must be made part of the insurance policy?

Copy of the original application

A father purchases a life insurance policy on his teenage daughter and adds the Payor Benefit rider. In which of the following scenarios will the rider waive the payment of the premium?

If the father is disabled for more than 6 months

If a policy has an automatic premium loan provision, what happens if the insured dies before the loan is paid back?

The balance of the loan will be taken out of the death benefit

Upon the death of the insured, the primary beneficiary discovers that the insured chose the interest only settlement option. What does this mean?

The beneficiary will only recieve payments of the interest earned on the death benefit

Which of the following settlement options in life insurance is known as straight life?

Life income

Life income joint and survivor settlement option guarantees...

Income for 2 or more recipients until they die

Which of the following named beneficiaries would be able to receive the death benefit directly from the insurer in the event of the insureds' death?

A business partner of the insured, wife of the deceased insured, former wife of the deceased insured

Which nonforfeiture option provides coverage for the longest period of time?

Reduced paid-up

The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called...

Waiver premium

An insured purchased a life insurance policy on his life naming his wife as primary beneficiary, and hi daughter as contingent beneficiary. Under what circumstances could the daughter collect the deth benefit?

If the primary beneficiary predeceased the insured

What is policy components contains the company's promise to pay?

Insuring clause

If a settlement option is not chosen by the policyowner or the beneficiary, which option will be used?

Lump sum

What is, when attached to a permanent life insurance policy, allows the policyowner to customize the policy to provide an additional amount of temporary insurance on the insured, or allows amounts of temporary insurance to cover other family members?

Term rider

A 40-year old man buys a whole life policy and names his wife as his only beneficiary. His wife dies 10 years later. He never remarries and dies at age 61, leaving 2 grown-up children. Assuming he never changed the beneficiary, the policy proceeds will go to...

The insured's estate

A father owns a life insurance policy on his 15-year-old daughter. The policy contains the optional Payor Benefit rider. If the father disabled, what will happen to the life insurance premiums?

The insured's premiums will be waived until she is 21