Policy Provisions, Options and Riders

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

Accumulation at Interest Option

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

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

All of the following are considered to be non-forfeiture options available to a policy owner EXCEPT?

Reduction of Premium

A provision that allows a policy owner to temporarily give up ownership rights to secure a loan is called a

collateral assignment

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

collateral assignment

Life insurance policies will normally pay for losses arising from?

commercial aviation

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

completely and permanently disabled

All of these are standard exclusions found in a life insurance policy EXCEPT

disability

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

disability income rider

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

fare-paying passenger

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

guaranteed insurability rider

Which of these in not considered to be a non forfeiture option in a whole life insurance policy

interest only

Which of these is NOT considered to be a common life insurance non-forfeiture option?

life income annuity

A guaranteed issue insurance policy has no

medical underwriting

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

minus indebtedness and without interest

Joanne has 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?

net death benefit will be reduced if the loan is not repaid

A provision in a whole life policy that allows a policy owner to terminate the policy in return for a reduced paid up policy of the same type is called a

nonforfeiture provision

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 of the grace period

Which situation accurately describes a reduced paid-up nonforfeiture option

policy has a decreased face amount

Kurt is an 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

A life insurance policy owner does not have the right to

revoke an absolute assignment

an endorsement found in an insurance plan which modifies the provisions of the policy is called a

rider

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

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

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

The free-look provision gives the policy owner?

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

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

waiver of premium

Loans obtained by a policyowner against the cash value of a life insurance policy

would not be treated as taxable income

Not part of an insurance contract?

certificate of authority

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

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

accelerated death benefit rider

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

accumulate without interest

Of the following dividend options, which of these is taxable

accumulation at interest