Life-Unit 7: Life Insurance Policy Provisions

Tim filled out an insurance application stating that he was 40 years old when in fact he was 43 years old. According to the misstatement of age provision, how would his insurance policy be adjusted? A) it would be canceled B) It would be adjusted to a lower face amount C) It would not be adjusted D) It would be adjusted to a higher face amount.

B) It would be adjusted to a lower face amount The lower the age, the higher the fee amount. The higher the age, the lower the face amount.

Consideration is a legal term meaning... A) Transfer of rights. B) Something of value C) the policy is the entire contract D) changes made to a contract

B) Something of Value exchange of value is necessary for a valid contract. The insured's consideration is the promise to pay premiums while the insurer's consideration is the promise to pay the face about upon death

When drying or paying a claim, which of the following is what the insurer will look at when making their decision? A) The insuring agreement B) The ownership rights C) The entire contract D) The policy assignment.

C) The entire contract They will look at only the contract. No other documents can be referred.

All of the following statements about endorsements are correct EXCEPT A) Changes must be made in writing B) Changes must be agreed to by both the insurer and the policyowner C) They can be authorized by an agent or producer D) They must be signed by an executive officer at the insurance company

C) They can be authorized by an agent or producer. Endorsements (changes made to the contract) must be made in writing by both the policyowner and the insurer. This must be signed by an executive officer of the company NOT by an agent or producer.

All of the following statements about an irrevocable beneficiary are true EXCEPT A) An irrevocable beneficiary can be changes with written consent from the policyowner B) If an irrevocable beneficiary dies before the insured, the policy owner usually had the right to name a new beneficiary C) Pollicyowners can give up their right to change a beneficiary desgination D) An irrevocable beneficiary can only be changed with her written consent.

D) An irrevocable beneficiary can only be changes with their written consent. Because the beneficiary is irrevocable, only the beneficiary's written consent can be used to change them.

If an insured commits suicide 3 years after the effective date on his policy, how will his life insurance be paid? A) Only the premium will be paid back B) There will no be any payment C) Half of the face amount will be paid D) The full face amount will be paid

D) The full face amount will be paid. The suicide clause is only in effect for the first two years.

The insurers promised to pay can be found in which of the following provisions? A) The entire contract provision B) The ownership rights provision C) The assignment provision D) The insuring clause provision

D) The insuring clause provision The insuring clause or insuring agreement sets forth the insurer's promised to pay benefits upon the insured's death. It include what and to whom the company will pay alone with the death benefit amount.

Leah owned a life insurance policy, and she decided that she wanted to transfer that policy to her son when he turned age 18. Which of the following assignments did Leah choose? A) Absolute assignment B) Collateral assignment C) Conditional assignment D) Temporary assignment.

A) Absolute assignment Absolute (permanent) assignment transfers all rights of ownership to another person or entity.

Tina and William have a policy with ad earth benefit that is distribute equally among all surviving members of their immediate family. Which of the following beneficiary designations did they chose? A) Per stirpes B) Per capita C) Equal shares D) By the branch

B) Per Capita Meaning 'by the head' it only includes the immediate family

All of the following are parties to a trust EXCEPT A) The beneficiary B) The trustee C) The insurer D) The grantor

C) The insurer A trust is a legal entity that van hold title to a property while it is managed for the benefit of others. The insurer has nothing to do with this.

Which of the following is NOT a common exclusion in the life insurance policies? A) Hazardous hobbies B) Natural Disasters C) War or Military D) Aviation

B) Natural disaster Basically think about something not in your control.

Suzanne and her spouse Bill were unable to make a premium payment in January. How long do they have to make a payment until their coverage will lapse? A) Up to 60 days B) Up to 31 days C) Up to 30 days D) Up to 45 days

B) Up to 31 days That is how long the grace period lasts. a little over a month.

All of the following statements about reinstatement are correct EXCEPT... A) The insured will receive the protection of the original policy B) The premium for the reinstated policy will be more than the original C) A permanent life policy permits reinstatement in nearly all cases. D) A reinstated policy starts a new contest ability period.

B) The premium for the reinstated policy will be more than the original. The premium for the reinstated policy will remain the same.

Which of the following is NOT a mode of premium payment? A) Monthly B). Quarterly C) Weekly D) Annually

C) Weekly C'mon bro you know this.

The insured nd the primary beneficiary are in a teddy bear accident and both die on the scene. Which of the following solves the problem of 'who died first?' assuming the primary beneficiary died first? A) The Uniform Simultaneous Death Act B) The common disaster provision C) Facility of payment provision D) The spendthrift provision

A) The Uniform Simultaneous Death Act Assumes the primary beneficiary died first so that they can pay the secondary beneficiary or the insured's estate (think about how the beneficiary is dead so how they gonna pay them???)

According to the free look provision, how may days does a policyowner have to return a policy for any reason? A) 15 days B) 10 days C) 30 days D) 45 days

B) 10 days It gives you 10 days to check out the policy and return it for any reason

Which of the following provisions states that after a life insurance policy has been in effect for 2 years, the company cannot claim that a statement made in the application was meant to defraud the insurer? A) The incontestability provision B) The reinstatement provision C)The assignment provision D) The contestability provision

A) the incontestability provision The first two years are the contestable period, meaning that the insurance company can ask for substantiation for statements in the application. The Incontestability period is when the company cant bitch no more and is to protect the iterm-9nsurer.