Nevada Life: Day 3
A policy owner who is also the insured wants to name her husband as the beneficiary of her life policy. She also wishes to retain all of the rights of ownership. The policyowner should have her husband named as the
Revocable beneficiary
Written modifications attached to a policy that provide benefits not found in the original policy are called
Riders
What is true regarding the aviation exclusion if the insured dies in a plane crash?
The insurer will pay the death benefit as long as the insured was a fare-paying passenger or a pilot on a regularly scheduled airline
Who designates the beneficiaries in a life insurance policy?
The policyowner
Which of the following statements is not correct about the waiver of premium rider?
Use of the waiver of premium rider reduces the face amount of the policy.
The settlement option that pays the beneficiary the death benefit proceeds in regular installments in a specified dollar amount is known as
Fixed-amount installments
The settlement option that pays the beneficiary the death benefit amount plus interest gained in a specified period of years is called a
Fixed-period installments
This provision allows a policy owner to look over the policy and if dissatisfied for any reasons, return it for a full refund
Free look
The automatic premium loan provision is activated at the end of the
Grace period
Which provision allows an insurance policy to remain in force for a specific number of days beyond the premium due date?
Grace period
Which rider allows this insured to purchase additional coverage amounts at specified future dates or specific events without evidence of insurability?
Guaranteed insurability
To offer a policy loan option, a policy must
Have cash value
The provision that stipulates when the premiums are due, how often, and to whom.
Payment of premium
Which rider found on juvenile policies waives the premiums if the person who pays the premiums dies or becomes disabled even though the policy owner and the insured are NOT the same person?
Payor benefit rider
When an insured dies, who has first claim to the death proceeds of the insured's life insurance policy?
Primary beneficiary
Which nonforfeiture option provides coverage for the longest period of time?
Reduced Paid-Up
What provision allows a policy to be restored if the policy lapsed no more than 3 years ago?
Reinstatement
If an insured continually uses the automatic premium loan option to pay the premium,
The policy will terminate when the cash value is reduced to nothing
Which of the following provisions or options protects the insured from an unintentional policy lapse due to a nonpayment of premium?
Automatic premium loan provision
How long is the free look period?
10 days
In Nevada, group health insurance covers groups of at least
2 people
A life policy is usually contestable due to material misrepresentation on the application for what period of time?
2 years
Insurers must pay the proceeds of any benefits under a group life insurance policy within how many days after the death of an insured?
30 days
How long is the grace period?
30 or 31 days (1 month)
If a policyowner transfers all rights to a policy to another party, what type of assignment would this be?
Absolute
What rider allows the early payment of a portion of the death benefit while the insured is still living?
Accelerated death benefit rider
Which of the following dividend options could create a taxable income to the policyowner of a participating whole life policy?
Accumulate at Interest
When a policyowner of a life insurance policy transfers partial or complete ownership of the policy to another person is called a/an
Assignment
When does the free look period begin?
At the time the policy is delivered to the policyowner
A Nonforfeiture option once selected, the insured will no longer have coverage
Cash Surrender
A dividend option in which the insurer simply sends the policyowner a check for the amount of the dividend as it is declared annually is called
Cash payment
When a beneficiary opts to receive the death benefit amount in one lump sum payment, this is called a
Cash payment option
Which of the following losses would likely be covered under the Accidental Death rider?"
Death caused by a head-on collision
Under which of the following riders will the insurer both waive the policy premiums and pay monthly income to the insured if the insured is disabled?
Disability Income Benefit Rider
Which provision of a life insurance policy states that the application along with the policy is part of the contract?
Entire contract clause
All of the following are true regarding group life insurance EXCEPT
Evidence of insurability is required
Which provisions eliminate coverage for certain causes of death such as sky diving or auto racing?
Exclusions
Which type of beneficiary designation cannot be changed without the consent of the beneficiary?
irrevocable
Which statement is INCORRECT concerning policy dividends?
the insurer may guarantee dividends
When a group plan is contributory, what percentage of employees must participate in the plan?
75%
The refund of unused or overpayment of premium on a participating policy is called
A dividend
Which of the following policy provisions states company's promise to pay benefits?
Insuring clause
Which temporary option maintains the death benefit while paying the beneficiary at regular intervals?
Interest-only
What is the benefit of choosing extended term as a nonforfeiture option?
It has the highest amount of insurance protection
Which settlement option, when a beneficiary uses the death benefit settlement as a single premium to purchase an annuity
Life Income
Which of the following will provide for reimbursement of health and social service expenses incurred in a nursing or convalescent home?
Long Term Care (LTC)
Which of the following is NOT a requirement for the reinstatement of a life insurance policy?
Make a collateral assignment of the cash value in the policy to the insurance company
Which of the following options protects a policyowner from losing the cash value when a policy is cancelled, surrendered or lapsed due to nonpayment?
Nonforfeiture option
Using the dividend to purchase additional insurance on an annual basis is called
One-year term
Which of the following disability riders waives the premiums if the insured becomes totally disabled?
Waiver of premium
When the policy owner at the time of application or the beneficiary at the time of the insured's death chooses the method used to pay the death benefit to the beneficiary is called a
Settlement option
Riders that can be attached to a policy to provide additional coverage on the insured or members of the family while keeping costs down are called
Term riders.
Withdrawals or partial surrenders are allowed on a Universal policy. What is true regarding withdrawals and partial surrenders?
The amount will be deducted from the death benefit
Under the Common Disaster Clause/Uniform Simultaneous Death Law if the insured and the beneficiary dies from a common accident and there is no clear evidence as to who died first. the law will assume that
The beneficiary died first
Which of the following is true about Term Riders?
The coverage is usually level term insurance
If an insured withdraws a portion of the face amount in the form of accelerated benefits because of a terminal illness, how will that affect the payable death benefit from the policy?
The death benefit will be smaller
All of the following are true about noncontributory plans EXCEPT
The employer pays for a portion of the premium and the employee pays the rest
If an insured dies during the grace period, what is the insurance company obligated to pay?
The face amount of the policy less any owed premium
Which of the following will receive the death benefit if the insured and the sole beneficiary both die together?
The insured's estate
What is the advantage of reinstating a policy instead of applying for a new one?
The original age is used for premium determination
A 40-year old man buys a whole life policy and names his wife as his only beneficiary. His wife dies 10 years later. He never remarries and dies at age 61, leaving 2 grown-up children. Assuming he never changed the beneficiary, the policy proceeds will go to
The insured's estate.
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 premium will be waived until she is 21
Which of the following nonforfeiture options would be automatically implemented by the insurer if none of the other options has been selected by the policyowner?
Extended term
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 beneficiary dies before the insured
All of the following are exclusions in an insurance policy EXCEPT
Illness
Which provision prohibits a company from challenging statements made on the original application?
Incontestability Clause
What provision allows the policyowner to name & change the beneficiary, receive the policy cash value, select the benefit payment option, and assign the policy?
Ownership rights
Using the policy dividends as a single premium to buy additional life insurance of the same type as the original policy is called
Paid up Additions
When accumulated dividends plus interest along with the policy cash value are used to pay up a policy early or sooner than originally planned?
Paid-up insurance
If a misstatement of age is discovered during the processing of a life insurance claim, what will the insurer do?
Pay an adjusted death benefit based on the premiums that were paid
If an insured dies with an outstanding policy loan, what will the insurer do?
Pay the death benefit minus the loan amount plus interest
Which of the following is a Nonforfeiture Option that provides protection till age 100 and continuing cash value buildup but reduces the original face amount?
Reduced Paid-Up
A dividend option in which the insurer uses the dividend to reduce the next year's premium is called
Reduction of Premium
Which policy rider normally attached to an increasing term policy allows for the return of all or a portion of the premiums paid at the end of the policy term if the insured is still living?
Return of premium
All of the following regarding conversion of a group life insurance are true EXCEPT
The premiums will remain the same
Which of the following is TRUE about nonforfeiture values?
They are required by state law to be included in the policy.
When someone other than the insured is the owner of a life insurance policy, this is called
Third-party ownership.
The waiver of cost of insurance rider is found in what type of insurance?
Universal Life
The type of assignment used when a policyowner assigns a portion of life insurance proceeds to a lending institution to secure a debt Is
Collateral
What is the clause that describes the method of paying the death benefit in the event that the insured and beneficiary are both killed in the same accident?
Common Disaster Clause
Which policy provision states that each party must provide something of value to each other in order for the contract to be valid?
Consideration
The Accidental Death Benefit Rider may pay either double or triple the face amount. All of the following are true regarding this rider EXCEPT
Covers intentional overdose
Which of the Nonforfeiture options maintains the original face value of the contract but sacrifices the length of the contract?
Extended Term
The Suicide Clause provision stipulates that if an insured buys a life insurance policy and commits suicide within 2 years following the policy effective date, the insurer will
Return premium paid to the beneficiary
Death benefits paid to a beneficiary are
Tax-free if taken as a lump-sum
According to the payment of claims provision in group life insurance policies, if the insured dies in the conversion period, the death benefit
Will be payable as a claim under the group policy.
