Chapter 3 Test 2

What benefit does the Payor clause on a Juvenile Life policy provide?

Premium are waived if payor becomes disabled

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

Reinstatement

The Accelerated Death Benefit provision in a life insurance policy is also known as a(n)

Living Benefit

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

Must have a terminal illness to qualify

P is the insured on a participating life policy. Which statement is true if P's premium are waived due to a disability?

P will still receive declared dividens

Which statement is TRUE in regards to a policy loan?

Past due interest on a policy loan is added to the total debt

M has an insurance policy that also has an outstanding policy loan at the time of M's death. The insurer will deduct the outstanding loan balance from the :

Policy proceeds

S buys a $50,000 whole life policy with $50,000 Accidental Death and Dismemberment rider. S dies 1 yr later of natural causes. How much will the insurer pay the beneficiary?

$50,000

The Consideration clause in a life insurance contract contains what pertinent information?

Amount of premium payments and when they are due

What action can a policyowner take if an application for a bank loan requires collateral?

Assign policy ownership to the bank

S would like to use dividends from her life insurance policy to purchase paid-up additions. All of these would be factors that determine how much coverage can be purchased. Except

Beneficiary's age

Whose life is covered on a life insurance policy that contains a payor benefit clause?

Child

All of these Settlement options involve the systematic liquidation of the death proceeds in the event of the insured's death, except

Interest only

Additional coverage can be added to a Whole Life policy by adding a(n):

Decreasing term rider

An insured is past due on his life insurance premium, but is still within the Grace Period. What will the beneficiary receive if the insured dies during this Grace Period?

Full face amount minus any past due premiums

Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options?

Variable Life

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

Waiver of premium

A Return of Premium life insurance policy is :

Whole life and increasing term

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

The automatic premium loan provision is designed to:

avoid a policy lapse