ExamFX Chapter 1

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which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium?

automatic premium loan

which of the following is not typically excluded from life policies

death due to plane crash for a fare-paying passenger

a rider attached to a life insurance policy that provides coverage on the insured's family member is called the

other-insured rider

which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which if the original recipient dies, the payments will continue to a designated beneficiary

life income with certain period

which of the following explains the policyowner's right to change beneficiaries, choose options and receive proceeds of a policy

owner's rights

an insured pays an annual premium to his insurer. In return, the insurer promises to pay benefits in accordance with the terms of the contract. This is called

consideration

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

all of the following are true statements regarding the accumulation at interest option except

the interest credited under this option is not taxable since it remains inside the insurance policy

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

which of the following riders would not cause the death benefit to increase

payor benefit rider

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

this rider is available to all insureds with no additional premiums

children's riders attached to whole life policies are usually issued as what type of insurance

term

which of the following would be deducted from the death benefit paid to a beneficiary, if a partial accelerated death benefit had been paid while the insured was still alive

amount paid with the accelerated benefit, plus the earnings lost by the insurance company in interest income from the accelerated benefit

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

the original age is used for premium determination

under an extended term nonforfeiture option, the policy cash value is converted to

the same face amount ass in the whole life

which of the following premium payment modes will incur the lowest overall payment

annual

what is the other term for the cash payment settlement option

lump sum

an absolute assignment is a

transfer of all ownership rights in a policy

the provision which states that both the policy and a copy of the application form the contract between the policyowner and the insurer is called the

entire contract

when a life insurance policy is cancelled and the insured has selected the extended term nonforfeiture option, cash value will be used to purchase term insurance that has a face amount

equal to the original policy for as long a period of time that the cash values will purchase

which of the following is true of a children's rider added to an insured's permanent life insurance policy

it is term coverage that is convertible to permanent insurance at or prior to the child reaching the maximum coverage age

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

which of the following factors determines the amount of each installment paid in a life income option arrangement

recipient's life expectancy and amount of principal


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