Policy Option

A policyowner surrenders a whole life policy for a reduced paid-up policy. What will happen to the cash value?

It continues to increase

All the following are nonforfeiture options EXCEPT

A)One-year term B) Cash surrender value C) Extended term D) Reduced paid-up insurance a

Which settlement option offers an unchanging amount of benefits until all proceeds are paid?

Fixed amount

Which divided option allows for the purchase of additional permanent insurance?

Paid-up additions

Which nonforfeiture option allows for insurance with a lower face amount but coverage that will remain the same as the original policy?

Reduced paid-up insurance

If a policyowner borrows funds from the cash value of her policy and does not pay back the loan amount, how will a claim on the death benefit be paid?

The death benefit paid to the beneficiary will be less the loan amount plus interest

The insured pays $1200 annually for her life insurance premium. This year, she has accumulated $175 worth of dividends, which she applies to her next premium payment which will be $1025. Which dividend option has she chosen?

Reduction of premium