Insurance Pre-licensing : Chapter 4 quiz

Life insurance policies that have cash value must provide for a maximum policy loan interest rate of no more than...

8% per annum

Which of the following is NOT typically excluded from life policies?

Death due to plane crash for a fare-paying passenger

Life income joint and survivor settlement option guarantees...

Income for 2 or more recipients until they die

The owner of a life insurance policy wishes to name two beneficiaries for the policy proceeds. What will the soliciting insurance producer say?

The policy owner can specify the way proceeds are split in the policy

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

the death benefit will be smaller

In Arizona, the grace period on a group life insurance policy applies to every premium payment EXCEPT...

the first

What is the purpose of settlement options?

they determine how death proceeds will be paid

The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the

Incontestability clause

Which of the following statements is TRUE about a policy assignment?

It transfers rights of ownership from the owner to another person

After a back injury, an insured is disabled for a year. His insurance policy carries a Disability Income Benefit rider. Which of the following benefits will he receive?

Monthly premium waiver and monthly income

An insured purchased a life policy in 2010 and died in 2020. The insurance company discovered at that time that the insured had misstated information about her insurance history on the application. What will the insurer do?

Pay the death benefit

Which of the following is TRUE about nonforfeiture values?

They are required by state law to be included in the policy

How long will the beneficiary receive payments under the single-life settlement option?

Until the beneficiary's death

Which is TRUE about the cash surrender nonforfeiture option?

funds exceeding the premium paid are taxable as ordinary income

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 the dividends to help pay for her next premium. What option would allow her to do this?

reduction of premium