chapter 3 life policy provsions, riders and options

what is the advantage of reinstating a policy instead of applying for a new one proof of insurability is not required the face amount increases the cash has gained interest the original age is used for premium determination

the original age is used for premium determination

Payor Benefit Rider

Which of the following riders would NOT cause the Death Benefits to increase?

An insured is diagnosed with cancer and needs help paying for her medical treatment.

Under which of the following circumstances would an insurer pay accelerated benefits?

Common Disaster Clause: if both the insured and beneficiary die in a COMMON accident, the insurer proceeds as if the insured outlived the beneficiary.

What is the clause that describes the method of paying the death benefit in the event that the insured and the beneficiary are both killed in the same accident?

lump sum

if a settlement option is not chosen by either the policyowner or the beneficiary, what option will be used?

life income joint and survivor settlement option guarantees payout of the entire death benefit equal payments to all recipients income for two or more recipients until they die payment of interest on death proceeds

income for two or more recipients until they die

what type of insurance would be used for a return of premium rider decreasing term annualy renewable term increasing term level term

increasing term

grace period

what provision in an insurance policy extends coverage beyond the premium due date

intrest only

all of the following are nonforfeiture options except

which of the following statements is true concerning the accidental death rider it is also known as a triple indemnity rider this rider is only available to insureds over the age of 65 it is inly available in group insurance it will pay double or triple the face amount

it will pay double or tripe the face amount

payor benefit rider

pays the premium if the payor is disabled or dies

which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies, a guaranteed period, during which, if the original recipient dies, the payment will continue to a designated beneficiary? A. joint & survivor B. single life C. fixed-amount D. life income with period certain

D. life income with period certain. this option guarantees payments for the life of the recipient AND specifies guaranteed period of continued payments. If the recipient dies in this period the payments would continue to a designated beneficiary for the remainder of the period

terminally ill

The accelerated benefits provision will provide for an early payment of the death benefit when the insured

Extended term

which nonforfeiture option has the highest amount of insurance protection conversion reduced paid up decreasing term extended term

owners rights

which of the following explains the policyowner's rights to change beneficiaries, choose options, and receive proceeds of a policy? the entire contract the consideration clause assignment rights owners rights

if the father is disabled for more than 6 months (payor benefit only pays if the owner, the father in this example, is disabled for at least 6 months)

a father purchases a life insurance policy on his teenage daughter and adds the payor benefit rider. in which of the following scenarios will the rider waive the payment of premium

Term this coverage is temporary as it expires when the minor reaches a certain age

children riders attached to whole life polices are usually issued as what type of insurance? Term variable life whole life adjustable life

it remains the same no matter how many children are added to the policy

which of the follwoig is true about the premimum on the chidrens rider in a life insurance policy

monthly income

Z falls from the roof of his house while fixing it and damages his spinal cord to render him disabled for a year. his insurance policy carries a disability income benefit rider. which of the following benefits will Z receive. Percentage of medical cost paid by the insurer payments for life yearly premium waiver and income monthly premium waiver and monthly income

The policy will terminate when the cash value is reduced to nothing:

If an insured continually uses the automatic premium loan option to pay the policy premium,

under an extended term nonforfeiture option, the policy cash value is converted to a higher face amount than the whole life policy the same face amount as in the whole life policy the face amount equal to the cash value lower face amount than the whole life policy

the same face amount as in the whole life policy ( under this option the insurer uses the policy cash value to convert to term insurance for the same face amount as the former permanent policy)

The insured's premiums will be waived until she is 21.

A father owns a life insurance policy on his 15-year-old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums?

50,000 It would remain the same as when it purchased

An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy?

fixed period

If a beneficiary wants a guarantee that benefits paid from principle and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select? fixed period life with period certain fixed amount interest only

0%

If an insured receives accelerated death benefit what is the least amount of the original death benefit that the beneficiary would receive after the insureds death

The insured's estate.

The sole beneficiary of a life insurance policy dies before the insured. If the policyowner fails to change the beneficiary before the insured's death, the proceeds of the policy will go to