Chapter 3 quiz: Life policy provisions, riders and options

An insured purchased a 15 year level term insurance policy with the face amount of 100,00$. The policy contained an accidental death rider, offering a double indemnity benefit. The insured was severely injured in an auto accident, and after 10 weeks of hospitalization, died from the injuries. What amount would his beneficiary receive as a settlement

200,000

What is the waiting period on a premium rider in life insurance policies

6 months

According to the entire contract provision, a policy must contain

A copy of the original application for insurance

Which of the following protects the insured from an unintentional policy lapse due to nonpayment of premium

Automatic premium loan

Which of the following best describes fixed period settlement options

Both the principal and interest will be liquidated over a selected period of time.

The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policy owner choose?

Interest option only

Which of the following statements about the reinstatement provision is true

It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated.

Regarding the free-look provision, the insurance company

Must allow the policyowner to return the policy for a full refund.

The ownership provision entities the policyowner to do all of the following except

Set premium rates

Nonforfeiture values guarantee which of the following for the policyowner?

That the cash value will not be lost

When the policy owner specifies a dollar amount in which installments are to be paid, he/she has chosen which settlement option?

a fixed amount

The two types of assignments are

absolute and collateral

If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select?

fixed period

An insured committed suicide 6 months after his life insurance policy was issued. The insurer will

refund the premiums paid