XCEL Chapter Exam - Life Provisions

K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary?

$20,000 death benefit

D owns a Whole Life policy that was purchased 10 years ago. If the premium payments suddenly stop and D takes no additional action, which Nonforfeiture Option will the insurer likely proceed with?

Extended term

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

The option that provides an additional death benefit for a limited amount of time at the lowest possible cost is called a(n)

Accidental Death and Dismemberment rider (AD&D)

a policyowner may generate taxable income from which of the following Dividend Options?

Accumulation at interest

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

Insured must be eligible for Social Security disability for claim to be accepted

in a life insurance policy, which provision states who may select policy options, designate and name a beneficiary, and be the recipient of any financial benefits from the policy?

owner's rights

A Term Life rider offers the insured

additional life coverage

Typically a life insurance death benefit is paid by a lump-sum payment. A(n) __________ option is a method of distributing a Life Insurance policy's death benefit OTHER than by a lump sum payment.

settlement

the consideration clause in a life insurance policy indicates that a policyowner's consideration consists of a completed application and

the initial premium

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

What is the Suicide provision designed to do?

safeguard the insurer from an applicant who is contemplating suicide

How are surrender charges deducted in a life policy with a rear-end loaded provision?

deducted when the policy is discontinued

Which provision prevents an insurer from changing the terms of the contract with the policyowner by referring to documents not found within the policy itself?

entire contract provision

Dividends paid from a life insurance policy are

issued by the insurer

An insured inability to perform two or more activities of daily living may trigger which type of policy rider?

long term care

The Consideration clause of an insurance contract contains what pertinent information?

amount of premium payments and when they are due

P died five years after purchasing a life policy. While investigating the claim, the insurer discovered material misrepresentations made by P during the application process. Which of these actions will the insurer take?

beneficiary will be paid the death benefit

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

policyowner

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