chap 4

And insured has a life insurance policy for me participating company and receives quarterly dividends. He has instructed the company to apply the policy dividends to increase the death benefit. The dividend option that the insured has chosen is called

paid up additions

of the following are true regarding the guaranteed insurability rider EXCEPT

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

If an insured withdraws A portion of the face amount in the form of accelerated benefit because of a terminal illness, how will that affect the payable death benefit from the policy?

The death benefit will be smaller

Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's Parents have died or become disabled?

payor benefit

which settlement option provides a single beneficiary with income for the rest of their life?

single life

A provision in a life insurance policy that provides for the early payment of some portion of the policy face amount should be insured suffer from a terminal illness or injury is called

accelerated benefit provision

Using a class designation for beneficiaries means

Naming beneficiaries as a group

According to the Entire Contract provision, a policy must contain

A copy of the original application for insurance

Accelerated benefits provision will provide for an early payment of the death benefit when the insured

Becomes terminally ill

Which of the following settlement options in life insurance has known a straight life?

Life income

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

Life income

Which nonforfeiture option has the highest amount of insurance protection?

Extended term

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 Like income settlement option. The amount of payments will be determined by taking into account all of the following except

The insured's age at death

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 settlement option. The amount of payments will be determined by taking into account all of the following except

The insured's age at death

If an insured continually uses the automatic premium loan option to pay the policy premium,

The policy will terminate when the cash value is reduced to nothing

Which is true about a spouse term rider?

The rider is usually level term insurance

If the policy owner, the insured, and the beneficiary under a life insurance policy are three different people, who has the ownership rights?

Policy owner

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

Reduced Paid-Up

when an insured under a life of 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 writer is attached to the policy?

Return of premium

which is NOT true about beneficiary designations?

The beneficiary must have insurable interest in the insured.

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 receive payments of the interest earned on the death benefit.

under which of the following circumstances would an insurer pay accelerated benefits?

An insured is diagnosed with cancer and needs help paying for her medical treatment

j applied for a life insurance policy one January. the policy was issued January 31. j's agent was vacationing at the time the policy was issued, so j did not receive the policy until February 18. j decides that he does not want the policy. when would j need to return to the insurer in order to receive a full refund of premium paid?

February 28, or 10 days after the time the policy is delivered

which of the following statements is true concerning irrevocable beneficiary?

They can be changed only with the written consent of that beneficiary

The paid-up addition option uses the dividend

To purchase a smaller amount of the same type of insurance as the original policy.

What limits the amount that a policy owner may borrow from the whole life insurance policy?

cash value

A business owner was trying to obtain a bank loan to fund the purchase of a new business facility, but the bank required proof of additional assets to secure the loan. The business owner then decided to use her $250,000 life insurance policy to secure the loan. Which provision makes this possible?

collateral assignment

A long stretch of national Canamak hardship clause is a 7% rate of inflation. The policy owner notices that the face value of her life insurance policy has been raise 7% as a result. Which policy rider caused this change?

cost of living rider

all of the following are features and requirements of the living needs rider except

diagnosis must indicate that death is expected within three years

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

If a life policy allows the policy owner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a

Guaranteed insurability rider

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

It will pay double or triple the face amount

Which of the following riders would not cause the death benefit to increase?

payor benefit rider

An absolute assignment is a

transfer of all ownership rights in a policy

What type of account will most likely be established for a minor?

trust

During partial withdrawal from a universal life policy, which portion will be taxed?

interest

What provision in an insurance policy extends coverage beyond the premium due date?

grace period