Lesson 3: chapter exam 2

The consideration cause any life insurance contract contains what pertinent information?

Amount of premium payments and when they are due

The agreement in a life insurance contract that states a specific set of money will be paid to a T signed a person upon an insured's death is called a

Insuring agreement

Which statement is true in regards to a policy loan?

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

Which of these life insurance riders allows the applicant to have excess coverage?

Term rider

Variable life

A life insurance policy where the insured determines how to invest the dollars that accumulate in cash value

Which of the following Divet in options results in taxable income to the policy owner?

Accumulation at interest

Beat owns a whole life policy with a guaranteed insurability option that allows him to purchase, without evidence of insurability, stated amount of

Additional term life coverage at specified intervals

Which of these types of policies may not have an automatic premium loan provision attached to it

Decreasing term

PS the insured on a participating life policy. Which statement is true of peas premiums are way overdue to a disability?

He was still receive declare dividends

All of these settlement options involve the systematic liquidation of the death proceeds in the event of the insured death except

Interest only

Which of these is not an example of a nonforfeiture option?

Life income

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

Must have a terminal illness to qualify

What benefits does the payer clause on a juvenile life policy provide?

Premiums are waived if hair becomes disabled

Which of these Nonforfeiture Options continue a build-up of cash value?

Reduced Paid-Up

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

Reinstatement

When Does a guaranteed insurability rider allow the insured to buy additional coverage?

at future dates specified in the contract with no evidence of insurability required

S would like to use dividends from her life insurance policy to purchase Paid up additions, all these would be Factors that determine how much coverage can be purchased except

beneficiary's age

The Incontestable clause allows an insurer to

contest a claim during the contestable period

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

decreasing term rider

When an insurer issues a policy that refers to cover certain risk this is referred to as a

Exclusion

The automatic premium loan provision is designed to

avoid a policy lapse

And a life insurance policy which features states that the policy will not cover certain risk?

Exclusion

L takes out a life insurance policy and dies 10 years later. During the claim process the insurer discovers the L had understated her age on the application. Under the miss statement of age provision the insurer will

Adjust the death benefit to a reduced amount

What does the insuring Agreement in a life insurance contract establish?

An insurer's basic promise

What action cam a policy on or take if an application for a bank loan requires collateral?

Assigned policy owner to the bank

S has a Whole Life policy with a premium payment due soon. Which provision would keep the policy in force if S does not make the required payment and the policy has adequate cash value from which the premium payment can be made?

Automatic Policy Loan

A policy loan is made possible by which of these life insurance policy features?

Cash value provision

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

Child

Which writer provides coverage for a child under a parents life insurance policy?

Child term rider

How do you live insurance companies handle cases where the insurance commits suicide within the contract stated can testable.?

Claims were denied under the suicide clause of the policy

Which of these actions is taken when the policy owner uses a life insurance policy as collateral for a bank loan?

Collateral agreement

Which statement regarding a miss statement of age provision is considered to be true?

Coverage will be adjusted to reflect the insurance true age is a misstatement of age is discovered

What provision in a life insurance policy states that the application is considered part of the contract?

Entire Contract provision

Which provision prevents an insurer from changing the terms of the contract with the policy owner by really boring two documents not found within the policy itself?

Entire contract provision

Which of these statements about A guaranteed insurability option rider is not true?

Evidence of insurability is required when the option is exercised

D is a policy owner and insured for $50,000 life insurance policy. The beneficiary is Dave's wife D and his wife divorced and he remarries transferring ownership of his policy to his new wife. If he dies without making any future changes, to whom will the policy proceed be paid to

Ex-wife

A long-term care rider in a life insurance policy pays A daily benefit in the event of which of the following?

Inability of the insured to perform more than 2 Activities of Daily Living (ADL's)

All of these statements about The waiver of premium provision are correct except

Insured must be eligible for Social Security disability for claim to be accepted

How are policy owner dividends treated in regards to income tax?

Interest on accumulations is taxed

Which of the following statements about accumulated interest earned on dividends from an insurance policy is true?

It is taxed as ordinary income

The accelerated death benefit provision in a life insurance policy is also known as a

Living Benefit

All of these statements considering settlement options are true except

Only the beneficiary may select( true statements Increasing proceeds can be provided through accumulation of interest, rapid depletion of Proceeds can be avoided, proceeds can be administrated by the insurance company)

Any life insurance policy which provision states who may select policy options designate And name a beneficiary in the recipient of any financial Benefits from the policy?

Owner's rights

A young married teacher has two children and I want a whole life policy. If the teacher wants and increasing death benefit to protect against inflation, the teacher should select which of the following Divet in options

Paid up additional insurance

All of the following statements are true regarding policies grace. Except

Past due premiums are waived. ( True statements policy loans may still be made, full coverage continues, Grace. Terms are stated in the policy)

A provision in a life insurance policy that pays the policy owner and amount that does not surpass the guaranteed cash value is called the

Policy loan provision

Emma has an insurance policy that also has an outstanding policy loan at the end of M's life. The insurance will deduct the outstanding loan balance from the

Policy proceeds

The provision that can be used to put in an insurance policy back-and-forth after it has lapsed due to nonpayment is

Reinstatement provision

What is the suicide provision design to do?

Safeguard the insurer from an applicant who is contemplating suicide

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

Variable life

When a Misrepresentation on the life insurance policy Application it is discovered what actions made an insurance company take?

Void the policy only if it is Discovered during the contestable. And proof and to be material

And life insurance policy will ensure the premiums will be paid if the insured becomes disabled has what kind of a rider attached

Waiver of premium

When is a face amount of a whole life policy paid

When the insured dies or at the policy's maturity date, whichever happens first

What does the ownership clause in a life insurance policy state?

Who the policyowner is and what rights the policyowner is entitled to

A return of premium life insurance policy is

Whole life and Increasing term

Which life insurance rider typically appears on a juvenile life insurance policy?

payor benefit rider

And insured is past due and life insurance premium but it still within the grace.. What will the beneficiary receive if the insured dies during the grace period?

Full face amount minus any past due premiums