Life Insurance module 3
The agreement in a life insurance contract that states a specific sum of money will be to a designated person upon a an insureds death is called an
Insuring agreement
B receives yearly dividends and interest from a participating life insurance policy. Which of these should B include as gross income for federal income tax purposes?
Interest only
Accidental Death and Dismemberment(AD&D) provision in a life insurance policy would pay additional benefits if the insured
Is blinded in an accident
Which of the following statements about accumulated interest earned on dividends from an insurance policy is true?
It is taxed as ordinary income
A return of premium life insurance policy is
Whole life and Increasing term
T took out a $50,000 life insurance policy with an Accidental Death and Dismemberment rider. Five years later, T commits suicide. How much will the insurer pay?
$50,000
An insurer may normally delay the payment of a cash value loan or surrender value for up to
6 months
A policyowner may generate taxable income from which of the following Dividend Options?
Accumulation at interest
What action can a policyowner take if an application for a bank loan requires collateral?
Assign policy ownership to the bank
A policy loan is made possible by which of these life insurance policy features?
Cash value provision
Which rider provides coverage for a child under a parent's life insurance policy?
Child term rider
How are surrender charges deducted in a life policy with a rear-end loaded provision?
Deducted when the policy is discontinued
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
An insured's inability to perform two or more activities of daily living may trigger which type of policy rider?
Long term care
K owns a Whole Life policy. If K wants an increasing Death Benefit to protect against inflation, which Dividend Option should she chose?
Paid-Up Additional Insurance
The ___ has the right to change a life insurance policy's beneficiary
Policy owner
What benefit does the Payor clause on a Juvenile Life policy provide?
Premiums are waived if payor becomes disabled
An rider may be used to include coverage for children under their parents life insurance policy
Term
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
Dividends paid from a life insurance policy are
issued by the insurer