Life Insurance Policy Provisions, Options, and Riders
If a settlement option is not chosen by the policy owner or the beneficiary, what option will be used by the insurer?
Lump-sum payment
What are the three nonforfeiture options in life insurance policies?
Cash surrender, reduced paid-up, and extended term
What are the dividend options in life insurance policies?
Cash, reduced premium, accumulation at interest, paid-up additions, paid-up option, one-year term, and acceleration of endowment
Which nonforfeiture option is automatically selected by the company if not selected by the policy owner?
Extended Term
What is the disadvantage of selecting the life income settlement option?
If the beneficiary dies shortly after the payments begin, the balance of the principal will be forfeited.
What dividend option is automatically selected by the company if not chosen by the policy owner?
Paid-up additions
Which nonforfeiture option provides coverage for the longest period of time?
Reduced Paid-Up
What happens to a policy's cash value under an extended term nonforfiteture opinion?
The cash value is converted to the same face amount as in the whole life policy
What settlement options are available in life insurance policies?
Lump-sum/cash, fixed period, fixed amount, life income, interest only