Policy Provision

If an insured's age on life insurance policy has been misstated what is the insurer's liability if the insure dies?

A prorated death benefit based on the amount of insurance the insured's premiums would have been if purchased at the correct age.

A provision that allows a policyowner to withdraw a policy's cash value interest free a(n) ___?

Partial surrender

The automatic premium loan provision authorizes an insurer to withdraw from a policy's cash value the amount of ?

Past due premiums that have not been paid by the end grace period

Which of these is NOT a characteristic of the Accelerated Death Benefit option?

The benefit can be offered as a rider at a specific extra cost or may be at no cost

Life insurance will normally pay for losses arising from ?

Commercial aviation

Ron has a life insurance policy with a face value of $100,000 and a cost of living rider. If the consumer price index has gone up 4%, how much may Ron increase the face value of the policy?

$4,000

The two major actions required for a policyholder to comply with Reinstatement Clause are ?

1) provide evidence of insurability, 2) pay past due premiums

A provision that allows a policyowner to temporarily give up ownership rights to secure a loan is called a(n) ____?

Collateral assignment

Which of these is considered to be a living benefit option in life insurance policy?

Accelerated death benefit

Which of the following is considered to be an alternative to a life sentence?

Accelerated death benefit rider

Which dividend option would an insurer invest the policyowner's money and add any interest earnings as the dividends accrue?

Accumulation at Interest Option

Which of these dividends options are taxable? 1) reduction of premium 2) one year term 3) paid-up additions 4) accumulation at interest

Accumulation at interest

An error was made on Mary's life insurance application. Which of the following areas are errors commonly made on applications for which the incontestable clause does NOT apply? 1) Marital status. 2) Age. 3)Address 4)Income

Age

Ownership of a life insurance policy may be temporarily transferred with a(n) ___?

Collateral assignment

Which of these is NOT part of an insurance contract? 1) policy 2) application 3) riders 4) certificate of authority

Certificate of authority

A waiver of premium rider allows an insured to waive premium payments if the insured is ___?

Completely and permanently disabled

In what part of an insurance policy are policy benefits found?

Declarations

A life insurance policyowner was injured in an automatic accident which results in a total and permanent disability. Which rider would pay a monthly amount because of this disability?

Disability income rider

What is the name of the provision which states that copy of the application must be attached to the policy when issued?

Entire Contract

Which of these would limit a company's liability to provide insurance coverage?

Exclusion

A life insurance rider that allows an individual to purchase insurance as they grow older, regardless of insurability, is called a(n)___?

Guaranteed insurability rider

Barbara's policy includes a rider which allows her to purchase additional insurance at specific dates or events without evidence of insurability. This rider is called a(n) ___?

Guaranteed insurability rider

What is NOT considered to be nonforfeiture option in a whole life insurance policy?

Interest only

What is the purpose for having an accelerated death benefit on a life insurance policy?

It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill

The automatic premium loan provision authorized an insurer to withdraw from a policy's cash value the amount of ___?

Last due premiums that have not been paid by the end of the grace period

Which of these is NOT considered to be a common life insurance nonforfeiture option?

Life income annuity

The suicide clause of a life insurance policy states that if an insured commits suicide within a stated period from the policy's inception, insurer will only be liable for a return of premiums paid

Minus indebtedness and without interest

Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value. She would like to borrow $15,000 against the cash value. Which of the following statements is TRUE? 1) net death benefit will reduce if not loss is not repeat 2) no interest will be charge on loan balance 3) term life policies are the only type of insurance that allows policy loans 4) A loan can be taken out for up to the face amount of the policy

Net death benefit will reduce if not loss is not repeated

A provision in a whole life policy that allows a policyowner to terminate the policy in return for a reduced paid-up policy of the same type is called a(n) ___?

Nonforfeiture provision

What is an insurer required to do when faced with an error made under the Misstatements of Age provision?

Pay age-corrected benefits

Which type of rider will waive the premium on a child's life insurance policy if the parent paying the premium dies?

Payor benefit

Which situation accurately describes a reduced paid-up nonforfeiture option?

Policy has a decreased face amount

In order to activate the reinstatement clause of a lapse life insurance policy, the insured MUST ___?

Provide evidence of insurability to the insurer

In order to activate the reinstatement clause of a lapsed life insurance policy, the insured MUST ___?

Provide evidence of insurability to the insurer

All of the following are considered to be nonforfeiture options available to policyowner EXCEPT?

Reduction of premium

A Policyowner may exercise which of these dividend options that uses dividends to pay all or part of the next premium due

Reduction of premium dividend options

Kurt in active duty serviceman who was recently killed in an accident while home on leave. Which military service exclusion clause would pay upon his death?

Results

An endorsement found in an insurance plan which modified the provision of policy is called a(n)___?

Rider

Under a life insurance policy, what does the insuring clause state?

The insurer's obligation to pay a death benefit upon an approved death claim

Under a life insurance policy, what does the insuring clause state?

The insurer's obligation to pay a death benefit upon an approved death claim.

Pat owns a 20-pay life policy with a paid-up dividend option. Which of the following statements is true?

The policy may be paid up early by using policy dividends

If an insured dies during the grace period with no premiums paid ____?

The policy would be payable, minus the premium amount

All of the following riders can increase the death benefit amount EXCEPT?

Waiver of Premium

All of these are valid policy dividend options for a life insurance policyowner EXCEPT

accumulate without interest

Matt is applying for life insurance and requests a double indemnity rider. A double indemnity benefit will be payable to Matt's beneficiary if Matt ____

dies instantly from a car accident

A life insurance policy normally contains a provision that restricts coverage in the event of death under all of following except

fare-paying passenger

An insurer will accept a premium from the insured and continue the coverage in full force as though it was NOT late during which time period?

grace period

A guaranteed issue insurance policy has no

medical underwriting

A life insurance policyowner does NOT have the right to ?

revoke an absolute assignment

An insured individual and the policy's beneficiary die from the same accident. The common disaster provision states the insurer will continue as if

the insured outlived the beneficiary

The free-look provision gives the policyowner?

the right to return the policy for a full refund within a specified number of days