Life Provisions

S buys a $50,000 whole life policy with a $50,000 accidental death and dismemberment rider. S dies 1 year later of natural causes. How much will the insurer pay the beneficiary?

$50,000

A policyowner may generate taxable income from which of the following dividend options?

Accumulation at interest

A cost of living rider gives the insured?

Additional death benefits

The consideration clause in a life insurance contract contains what pertinent information?

Amount of premium payments and when they are due

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

A whole life insurance policyowner does NOT have the right to?

Change the grace period

Which of these statements about a guaranteed insurability option rider is NOT TRUE?

Evidence of insurability is required when the option is exercised

How are policyowner dividends treated in regards to income tax?

Interest on accumulation is taxed

The accidental death and dismemberment (AD&D) provision in a life insurance policy would pay additional benefits if the insured?

Is blinded by an accident

K's whole life insurance policy lapsed two months ago due to nonpayment. She would now like to reinstate the policy. All of these statements are correct about the policy's reinstatement EXCEPT?

K will forfeit the right to use the automatic loan provision upon reinstatement

Which of these is NOT considered to be a right given to a policyowner?

Modify a provision in the insurance contract

In a life insurance policy, which provision states who may select policy options, designate and name a beneficiary, and be the recipient of any financial benefits from the policy?

Owners rights

B recently died and was insured with a life insurance policy for over 5 years. During the claims process, the insurer discovered that B understated his age by 5 years at the time of the application. In this situation, the insurer will?

Pay the amount that the premium would have purchased at the correct age

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

Payor benefit rider

The ________ has the right to change a life insurance policy's beneficiary?

Policyowner

Which of the following is an example of nonforfeiture option?

Reduced paid-up option

The provision that can be used to put an insurance policy back in force after it has lapsed due to nonpayment is called?

Reinstatement

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

The entire contract provisions

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