Life Insurance: Chapter 3: Quiz

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

6 months

when an insured under a life insurance policy died, the designated beneficiary will receive the face amount of the policy, as well as a refund of all premiums paid. which rider is attached to the policy?

Return of premium

what is true about a spouse term rider?

The rider is usually level term insurance

which of the following named beneficiaries would not be able to directly receive the full face amount directly from the insurer in the event of the death of the insured

a minor on the policy

A business owner was trying to obtain a bank loan to fund the purchase of a new business facility, but the bank required proof of additional assets to secure the loan. The business owner then decided to use her $250,000 life insurance policy to secure the loan. Which provision makes this possible?

collateral assignment

all of the following are true regarding the guaranteed insurability rider except? 1) the insured may purchase additional insurance up to the amount specified in the base policy 2) it allows the insured to purchase additional amounts of insurance without providing proof of insurability as specified dates and events 3) the rider is available to all the insureds with no additional premiums 4) the insured may purchase additional coverage at the attained age

3) the rider is available to all the insureds with no additional premiums

An insured pays an annual premium to his insurer. In return, the insurer promises to pay benefits in accordance with the terms of the contract. This is called

consideration

According to the entire contract provision, what document must be made part of the insurance policy?

copy of the original application (also any riders, and the policy)

the automatic premium loan provision is activated at the end of what period?

grace period provided there is suffificent cash value in the policy, this provision triggers a loan at the end of the period to keep the policy in force

which of the following settlement options in life insurance is known as straight life

life income provides the recipient with an income from the benefit that he or she cannot outlive

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

pay a reduced death benefit

Which nonforfeiture option provides coverage for the longest period of time?

reduced paid up The reduced paid up nonforfeiture option would provide protection until the insured reaches 100, but the face amount is reduced to what the cash would buy

In a case where the primary beneficiary predeceases the insured, in the event of the insured's death, the death benefit proceeds will be paid to

the contingent beneficiary

An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy?

$50,000 The face of the term policy would be the same as the face amount provided under the whole life policy

Which of the following is true about nonforfeiture options? 1) they are required by state law to be included in the policy? 2) they are optional provisions 3) a table showing nonforfeiture values for the next 10 years must be included in the policy 4)policy owners do not have the authority to determine which nonforfeiture option they get

1) theya re required by state law to be included in the policy