Chapter exam to policy provisions options and riders
S buys a $50,000 whole life policy with a $50,000 accidental death and disbursement rider. S dies One year later of natural causes. How much will the insurer pay the beneficiary?
$50,000
P purchases a $50,000 term life insurance policy in 2005. One of the questions on the application ask if P engages in scuba diving, to which P answers "No". The policy is then issued with no scuba exclusions. In 2010, P takes up scuba diving and dies in a scuba-related accident in 2011. What will the insurer pay to P's beneficiary?
$50,000 minus any outstanding policy loans
Which of the following statements is correct about accelerated death benefits
Must have a terminal illness to qualify
P is the insured on a participating life policy. Which statement is true of if P's premiums are waived due to a disability?
P will still receive declared dividends
Which of the following provisions guarantees that premiums will be waived if a juvenile life policy owner becomes disabled
Payor clause
The ____ is Authorized to assign a life insurance policy as collateral for a loan
Policyowner
Which of these nonforfeiture options continue a build up of cash value
Reduced Paid-Up
The provision that can be used to put an insurance policy back in force after it has lapsed due to nonpayment is called
Reinstatement
Which of these provisions require proof of insurability after a policy has lapsed
Reinstatement
J let her life insurance policy lapse 8 months ago due to nonpayment. She can reestablish coverage under which of the following provisions?
Reinstatement provision
Which of these life insurance riders allows the applicant to have excess coverage?
Term rider
How are surrender charges deducted in a life policy with a rear-end loaded provision?
Deducted when the policy is discontinued
The option that provides additional death benefit for a limited amount of time at the lowest possible cost is called a
Accelerated death and disbursement rider
What does the insuring agreement in a life insurance contract establish
An insurer's basic promise
What action can a policy owner take if an application for a bank loan requires collateral?
Assign policy ownership to the bank
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
Which writer provides coverage for a child under a parents life insurance policy
Child term rider
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
The agreement in a life insurance contract that states a specific sum of money will be paid to a designated person upon an insured's death is called a(n)
Insuring agreement
In a life insurance contract and insurance company's promise to pay stated of benefits is called the
Insuring clause
All of these Settlement options involve the systematic liquidation of the death proceeds in the event of the insured's death EXCEPT
Interest only
An insured's inability to perform two or more activities of daily living make sugar which type of life policy writer
Long term care
The Consideration clause in a life insurance policy indicates that a policyowner's consideration consist of a completed application and
The initial premium
The free look provision begins
Upon receipt of the policy by the Policyowner
Which of these types of life insurance allows the policy owner to have a level premiums and to also choose from a selection of investment options?
Variable Life
Which type of life policy contains a monthly mortality charge as well as self directed investment choices
Variable Universal Life
When a misrepresentation on a life insurance policy application is discovered what action me an insurance company take
Void the policy only if it is discovered during the contestable period and proven to be material
A life insurance policy which ensures that the premium will be paid off if the insured becomes disabled has what kind of rider attached?
Wavier of premium
A return of premium life insurance policy is
Whole life and Increasing term
A cost of living rider gives the insured
additional death benefits