Policy Provisions, Options and Riders
medical underwriting
A guaranteed issue insurance policy has no
fare-paying passenger
A life insurance policy normally contains a provision that restricts coverage in the event of death under all of the following situations EXCEPT
guaranteed insurability rider
A life insurance rider that allows an individual to purchase insurance as they grow older, regardless of insurability, is called a(n)
Reduction of premium dividend option
A policyowner may exercise which of these dividend options that uses the dividend to pay all or part of the next premium due?
nonforfeiture provision
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)
collateral assignment
A provision that allows a policyowner to temporarily give up ownership rights to secure a loan is called a(n)
nonforfeiture option
A whole life policy option where extended term insurance is selected is called a(n)
Reduction of Premium
All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT
Waiver of Premium
All of the following riders can increase the death benefit amount EXCEPT
accumulate without interest
All of these are valid policy dividend options for a life insurance policyowner EXCEPT
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)
the policy would be payable, minus the premium amount
If an insured dies during the grace period with no premiums paid
Declarations
In what part of an insurance policy are policy benefits found?
Net death benefit will be reduced if the loan is not repaid
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?
would not be treated as taxable income
Loans obtained by a policyowner against the cash value of a life insurance policy
Accumulation at interest
Of the following dividend options, which of these is taxable?
The policy may be paid up early by using policy dividends
Pat owns a 20-pay life policy with a paid-up dividend option. Which of the following statements is true?
past due premiums that have not been paid by the end of the grace period
The automatic premium loan provision authorizes an insurer to withdraw from a policy's cash value the amount of
Entire Contract
What is the name of the provision which states that a copy of the application must be attached to the policy when issued?
Accumulation at Interest Option
Which dividend option would an insurer invest the policyowner's money and add any interest earnings as the dividends accrue?
Proof of insurabiilty
Which of the following is a reinstatement condition?
Accelerated death benefit rider
Which of the following is considered to be an alternative to a life settlement?
Life income annuity
Which of these is NOT considered to be a common life insurance nonforfeiture option?
Accelerated death benefit
Which of these is considered to be a Living Benefit option in a life insurance policy?
Exclusion
Which of these would limit a company's liability to provide insurance coverage?
Policy has a decreased face amount
Which situation accurately describes a reduced paid-up nonforfeiture option?
Payor benefit
Which type of rider will waive the premium on a child's life insurance policy if the parent paying the premium dies?