Policy Provisions

All of the following statements are true regarding a policy's Grace period, EXCEPT:

(A) Past due premiums are waived B) Policy loans may still be made C) Full coverage continues D) Grace period terms are stated in the policy

An insurer may normally delay the payment of a cash value loan or surrender value for up to

6 Months

All of these statements about the Waiver of Premium provision are correct, EXCEPT:

A) A waiting period must pass before becoming eligible for benefits. B) Waiver of premium is available on both permanent and term insurance policies. (C) Insured must be eligible for Social Security disability for claim to be accepted. D) Insured must be totally disabled to qualify

Which of the following Nonforfeiture options offers the highest death benefit?

A) Cash surrender B) Reduced Paid-up (C) Extended term D) Dividend

Which of the following is an example of a nonforfeiture option?

A) Conversion option (B) Reduced Paid-Up option C) Inflation option D) Guaranteed Insurability option

Which statement is TRUE in regards to a policy loan?

A) Past-due interest payments not paid after 3 months will void the policy. (B) Past-due interest on a policy loan is added to the total debt C) Insurance companies can send delinquent interest accounts to a collection agency D) Insurance companies can charge an interest rate based on the policyowner's credit report.

P is blinded in an industrial accident. Which provision of his life insurance policy will pay a stated benefit amount?

Accidental Death and Dismemberment clause

B owns a Whole Life policy with a guaranteed insurability option that allows him to purchase, without evidence of insurability, stated amounts of

Additional Whole Life coverage at specified times.

S has a Whole Life policy with a premium payment due soon. Which provision would keep the policy in force if S does not make the required payment and the policy has adequate cash value from which the premium payment can be made?

Automatic Policy Loan

The Automatic Premium Loan provision is designed to:

Avoid a policy lapse

How do life insurance companies handle cases where the insured commits suicide within the contract's stated Contestable period?

Claims are denied under the Suicide clause of the policy.

The incontestable clause allows the insurer to:

Contest a claim during the Contestable period.

An insured is past due on his life insurance premium, but is still within the Grace Period. What will the beneficiary receive if the insured dies during this Grace Period?

Full face amount minus any past due premiums.

The Accidental Death and Dismemberment (AD&D) provision in a life insurance policy would pay additional benefits if the insured:

Is blinded in an accident

M has an insurance policy that also has an outstanding policy loan at the time of M's death. The insurer will deduct the outstanding loan balance from the:

Policy proceeds

The ___ has the right to change a life insurance policy's beneficiary.

Policyowner

J let her life insurance policy lapse 8 months ago due to nonpayment. She can reestablish coverage under which of the following provisions?

Reinstatement provision

S buys a $10,000 Whole Life policy in 2003 and pays an annual premium of $100. S dies 5 years later in 2008 and the insurer pays the beneficiary $10,500. What kind of rider did S include on the policy?

Return of premium rider

D was actively serving in the Marines when he was killed in an automobile accident while on leave. His $100,000 Whole life policy contains a War Exclusion clause. How much will D's beneficiary's receive?

The full face amount

A life insurance policy which ensures that the premium will be paid if the insured becomes disabled has what kind of rider attached?

Waiver of Premium