Life Policy riders, provisions, options and exclusions

Which of the following named beneficiaries would NOT be able to receive the death benefit directly from the insurer in the event of the insureds' death?

A minor because they do not have the legal capacity to release the insurer from further obligation. Would need to pass through a guardian.

Which riders would not cause the death benefit to increase?

Payor benefit rider

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

Reduced paid-up

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

Which of the following best describes fixed-period settlement option?

Both the principle and interest will be liquidated over a selected period of time

Which two terms are associated directly with the premium?

Level or flexible

An insured has a continuous premium whole life policy. She would like to use the policy dividends to pay off her policy sooner than would have been possible otherwise. What dividend option could she use?

Paid-up option

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

the same face amount as in the whole life policy

Which option is being utilized when the insurer accumulates dividends at interest and then uses the accumulated dividends, plus interest, and the policy cash value to pay the policy up early?

Paid-up option

Life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the

Incontestability clause

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

Joint and survivor

Which nonforfeiture option has the highest amount of insurance protection?

Extended Term

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

Life income

When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to

Purchase a single premium for a reduced face amount

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

A father purchases a life insurance policy on his teenage daughter and adds the Payor Benefit rider. In which of the following scenarios will the rider waive the payment of premium?

If the father is disabled for more than 6 months

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

An insured purchased a life insurance policy on his life naming his wife as primary beneficiary, and his daughter as contingent beneficiary. Under what circumstances could the daughter collect the death benefit?

If the primary (mom) beneficiary predeceased the insured

Which is true about a spouse term rider?

The rider is usually level term insurance

Which best describes fixed-period settlement option?

Both the principal and interest will be liquidated over a selected period of time.

What is not true regarding the guaranteed insurability rider

This rider is available to all insureds with no additional premium

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

Becomes terminally ill

Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policyowner?

Cash surrender