Life Insurance and Health Life Policy Riders

If a life policy allows the policy owner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a

Guaranteed Insurability rider

What is the waiting period on a Waiver of Premium in life insurance policies

6 months

Which of the following is NOT typically excluded from life policies?

Death due to plane crash for a fare-paying passenger

At the time the insured purchased her life insurance policy, she added a rider that will allow her to purchase additional insurance in the future without having to prove insurability. This rider is called

Guaranteed insurability

If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select?

fixed period

A father owns a life insurance policy on his 15-year-old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums?

the insured's premiums will be waived until she is 21.

Children's riders attached to whole life policies are usually issued as what type of insurance?

term

Under which of the following circumstances would an insurer pay accelerated benefits?

An insured is diagnosed with cancer and needs help paying for her medical treatment

What is the waiting period on a Waiver of Premium rider in life insurance policies?

6 months

When the policy owner specifies a dollar amount in which installments are to be paid, he/she has chosen which settlement option?

Fixed amount

When the policyowner specifies a dollar amount in which installments are to be paid, he/she has chosen which settlement option?

Fixed amount

All of the following are Nonforfeiture options EXCEPT

Interest only

The type of settlement option which pays throughout the lifetime of two or more beneficiaries is called

Joint and survivor

A life insurance policy does not have a war clause. If the insured is killed during a time of war, what will the beneficiary receive from the policy?

The full death benefit

Which is TRUE about the cash surrender nonforfeiture option?

Funds exceeding the premium paid are taxable as ordinary income.

If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a

Guaranteed insurability rider

If a settlement option is not chosen by the beneficiary or policyowner, which option will be used?

lump sum

What provision in an insurance policy extends coverage beyond the premium due date?

grace period

What required provision protects against unintentional policy lapse?

grace period

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

annual

An insured purchased a 15-year level term life insurance policy with a face amount of $100,000. The policy contained an accidental death rider, offering a double indemnity benefit. The insured was severely injured in a auto accident, and after 10 weeks of hospitalization, died from the injuries. What amount would his beneficiary receive as a settlement?

$200,000

If an insured receives accelerated death benefits, what is the least amount of the original death benefit that the beneficiary would receive after the insured's death?

0%

The provision which states that both the policy and a copy of the application form the contract between the policy owner and the insurer is called the

Entire Contract

Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died of became disabled?

Payor Benefit

What is the purpose of a fixed-period settlement option?

To provide a guaranteed income for a certain amount of time

Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary?

Life income with period certain

Which is NOT true about beneficiary designations?

The beneficiary must have insurable interest in the insured.

The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called

Waiver of Premium

The insured under a $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple indemnity rider in the policy specifies that the death must no be contributed to by the insured in any manner. In this case, what will the policy beneficiary receive?

$100,000

An individual is purchasing a permanent life insurance policy with a face value of $25,000. While this is all the insurance that he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy?

Guaranteed insurability option

What would be an advantage to naming a contingent or secondary beneficiary in a life insurance policy?

It determines who receives policy benefits if the primary beneficiary is deceased.

Which of the following statements is TRUE concerning the Accidental Death Rider?

It will pay double or triple the face amount

Under an extended term nonforfeiture option, the policy cash value is converted to

The same face amount as in the whole life policy

Which of the following statements is TRUE concerning irrevocable beneficiaries?

They can be changed only with the written consent of that beneficiary.

An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is skilled in an automobile accident and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do?

Pay a reduced death benefit

Which of the following riders is often used in business policies when the policy owner needs to change the insured under the policy?

Substitute insured rider

The interest earned on policy dividend is

Taxable

Which of the following, when attached to a permanent life insurance policy allows the policy owner to customize the policy to provide an additional amount of temporary insurance on the insured, or allows amounts of temporary insurance to cover other family members?

Term rider

An Insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?

The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive.

Which of the following is TRUE about nonforfeiture values?

They are required by state law to be included in the policy.

All of the following are true regarding the guaranteed insurability rider EXCEPT

This rider is available to all insureds with no additional premium.

What is the purpose of a free look period in insurance policies?

it allows the insured to reject the policy with a full refund

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

Joint and survivor

The Validity of coverage under a life insurance policy may not be contested, except for nonpayment of premium, after the policy has been in force for at least how many years?

2 years

The accelerated benefits provision will provide for an early payment of the death benefit when the insured

Becomes terminally ill

An insured receives an annual life insurance dividend check. What term best describes this arrangement?

Cash option

When an insured under a life insurance policy died, the designated beneficiary received the face amount of the policy as well as a refund of all the premiums paid. Which rider is attached to the policy?

Return of premium

Which of the following riders would NOT cause the Death Benefit to increase?

payor benefit rider

Which of the following protects the insured from unintentional policy lapse due to a nonpayment of premium?

Automatic premium loan

What would be an advantage to naming a contingent (or secondary) beneficiaries in a life insurance policy?

It determines who receives policy if the primary beneficiary is deceased

All of the following are dividend options EXCEPT

Fixed period installments

When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy?

It is reduced to the amount of what the cash value would buy as a single premium

The policyowner pays for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this?

Reduction of Premium

Nonforfeiture values guarantee which of the following for the policyowner?

That the cash value will not be lost.

Upon the death of the insured, the primary beneficiary discovers that the insured chose the interest only settlement option. What does this mean?

The beneficiary will only receive payments of the interest earned on the death benefit.

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

The policy will terminate when the cash value is reduced to nothing