Life Insurance Policy Provisions, Options, and Exclusions

What is a policy assignment?

It transfers rights of ownership from one owner to another

Does the face amount change upon the cash value fluctuating?

No

Guaranteed Insurability Rider

Optional rider that enables the policyowner to purchase additional amounts of coverage at predetermined times without proof of insurability.

What is the advantage of re-instating a policy in life insurance rather than applying for a new one?

The original age is used for premium determination

Is accumulation of interest taxable?

Yes

How long does the insurer have to let the insured know their policy is going to lapse from a policy loan not getting paid?

30 days

For how long is an insurance company allowed to defer policy loan requests

6 months

What is the waiting period for the waiver of premium rider ?

6 months

Which of the following premium payments will incur the lowest overall payment?

Annual

Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policyowner?

Cash Surrender

Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member?

Family Term Rider

Which of the following best describes the fixed-period settlement option?

Both the principal and interest will be liquidated over a select period of time

Life Income joint and survivor settlement option guarantees

income for two or more recipients until they die

The type of option that pays throughout the lifetimes of two or more beneficiaries is called

Joint and Survivor

What is stated in the consideration clause of a life insurance policy?

the amount of premium payment

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

Incontestability Clause

Which of the following is true about the premium on the children's rider in a life insurance policy??

It remains the same no matter how many children are added to the policy

what rider is spouse term insurance usually?

Level Term Insurance

Which of the following statements about a suicide clause in a life insurance policy is true?

Suicide is excluded for a specific period of years and covered thereafter

When does a payor benefit rider premium get waiver to?

Until the child turns 21

With a double or triple indemnity rider, if it is shown the accident was the insureds fault, what happens?

the death benefit is only paid out as normal, the indemnity rider is voided

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

the policy will terminate and the cash value is reduced to nothing