CH. 3 Quiz

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 an insured under a life insurance policy died, the designated beneficiary received the face amount of the policy, as well as a refund of all of the premiums paid. which rider is attached to the policy?

Return of premium.

The sole beneficiary of a life insurance policy dies before the insured. If the policyowner fails to Change the beneficiary before the insured's death, the proceeds of the policy will go to

The insured's estate.

The two types of assignments are

Absolute and collateral

All of the following statements concerning dividends are true

Favorable investment results generate higher dividends, lower insurance company cost generate higher dividends, They stem from favorable underwriting experience

For how long is an insurance company allowed to defer policy loan requests?

6 months

An insured had a $10,000 term policy. the annual premium of $200 was due on February 1; however, the insured failed to pay the premium. He died on February 28. how much would the beneficiary recive from the policy?

9,800

All of the following are nonforfeiture options

Cash surrender, Extended term, Reduced paid-up

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

Life income

When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to

Purchase a single premium policy for a reduced face amount.

Nonforfeiture values guarantee which of the following for the policyowner?

That the cash value will be lost

What is true about beneficiary designations?

The policy does not have a beneficiary named in order to be valid, Trust can be valid beneficiaries, The beneficiary may be natural person.

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

Waiver of premium

An insured receives an annual life insurance dividend check. what term best describes the arrangement?

cash option

If an insured under a variable life insurance policy dies, ow will the insurer respond to outstanding policy loans?

the loan amounts are deducted from the death benefit

What is the advantage of reinstating a policy instead of applying for a new one?

the original age is used for premium determination.

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 premium?

If the father is disabled for more than 6 months

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 policyowner choose?

Interest and only option

Which of the following riders added to a life insurance policy can pay part of the death benefit to the insured to cover expenses incurred in a nursing or convalescent home?

Long-term care

A couple owns a life insurance policy with a childerens term rider. their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. which of the following will she need to provide for proof on insurability?

Proof of insurability is not required.

an insured has had a life insurance policy that he purchase 3 years ago when he was 40 years old. he is killed in an automobile accident and it is discovered that he is actually 45 years old, and not 43, as stated on the application, what will the company do?

pay a reduced death benefit

An insured purchased a 15 year level term life insurance policy with a face amount of 100,000. the policy contained an accidental death rider, offering a double indemnity benefit. the insured was severely injured in an auto accident, and after 10 weeks of hospitalization, dies from the injuries. what amount would his beneficiary receive as a settlement?

$200,00

Which of the following components must a life insurance policy have to allow policy loans?

cash value

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

copy of the original application

What nonforfeiture option provide coverage for the longest period of time?

Reduced Paid-up

The policy owner pays for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. She has decided that she would rather use dividends to help pay for her next premium. what option would allow her to do this?

Reduction of premium

If a life insurance policy has an irrevocable beneficiary designation,

The beneficiary can only be changed with written permission of the beneficiary.

all of the following are true regarding the guaranteed insurability rider EXCEPT

This rider is available to all insureds with no additional premium.

What would be an advantage to naming a contingent (or second) beneficiary in a life insurance policy?

It determines who receives policy benefits if the primary beneficiary is deceased.

a policy owner fails to pay the premium due to his whole life policy after the grace period passes, but the policy remains in force. this is due to what provision?

Automatic premium loan

Items stipulated in the contract that the insurer will not provide coverage for are found in the

exclusion clause

Which nonforfeiture option has the highest amount of insurance protection?

extended term

Which of the following is true about the 10-day-free-look period in a life insuance policy?

It begins when the policy is delivered

which of the following statements is true concerning the accidental death rider?

It will pay double or triple the face amount.

The type of settlement option which pays through the lifetimes of two or more beneficiaries is called

Join t and survivor

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

The insured had his wife named as the beneficiary of his life insurance policy. to ensure that his wife had income for life after the insured's death, he chose the life income settlement option. The amount of payments will be determined be taking into account all of the following except

The insured's age at death.

An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?

The surviving beneficiary will continure receiving 2/3 of the benefit when both beneficiaries were alive.

The insured under a $100,000 life insurance policy with a triple indemnity rider in the policy specifies that the death must not be contributed to by the insured in any manner. in this case, what will the policy beneficiary recieve?

100,000

If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select?

fixed period

the automatic premium loan provision is activated at the end of the

grace period

Which of the following is true about the 10-day free-look period in a life insurance policy?

it begins when the policy is delivered