Life provisions

What option provides an additional death benefit for a limited amount of time at the lowest possible cost?

Accidental death and dismemberment (AD&D) rider

A whole life policy with a guaranteed insurability option allows the owner, without evidence of insurability, to purchase what?

Additional whole life coverage at specified times

P died five years after purchasing a life policy. While investigating the claim, the insurer discovered material misrepresentations made by P during the application process. Which of these actions will the insurer take?

Beneficiary will be paid the Death Benefit

How do life insurance companies handle cases where the insured commits suicide within the contract's stated Contestable period?

Claims are denied under the Suicide clause of the policy

What does the incontestable clause allow the insurer to do?

Contest a claim during the contestable period

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

Inability of the insured to perform more than 2 activities of daily living (ADL's)

What is the agreement in a life insurance policy that states a specific sum of money will be paid to the beneficiary upon the insured's death?

Insuring agreement

How are policyowner dividends treated in regards to income tax?

Interest on accumulations is taxed

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

Owner's rights

Which statement is TRUE in regards to a policy loan?

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

Which life insurance rider allows excess coverage for the applicant?

Term rider

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

Variable Life

What type of life policy contains a monthly mortality charge as well as self directed investment choices?

Variable universal life

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

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

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

adjust the death benefit to a reduced amount

What action will an insurer take if an interest payment on a policy loan is not made on time?

automatically add the amount of interest due to the loan balance

Variable Whole Life Insurance can be described as

both an insurance and securities product

M has an insurance policy that also has an outstanding policy loan at the time of M's death. The insurer will deduct the outstanding loan balance from the:

policy proceeds