Chapter 4: Life Insurance Policy Provisions, Options and Riders

Which of the following statements is TRUE concerning the Accidental Death Rider?

It will pay double or triple the face amount

An insured purchased a life insurance policy on his life naming his wife as primary beneficiary, and his daughter as contingent beneficiary. Under what circumstances could the daughter collect the death benefit?

If the primary beneficiary predeceases the insured.

what is the waiting period on a Waiver of Premium rider in life insurance policies?

6 months

The two types of assignments are:

Absolute and collateral absolute assigns the entire policy, collateral assigns a part or all of the benefits

Which of the following is TRUE about a class designation?

Beneficiaries are not identified by name.

Which entity determines the amount of accelerated death benefits that will be paid to an insured?

The Insurer

The Waiver of Cost of Insurance rider is found in what type of insurance?

Universal Life

According to the entire contract provision, what document must be made part of the insurance policy?

Copy of the original application

A rider that may be attached to a life insurance policy that will adjust the face amount based upon a specific index, such as the consumer price index, is called?

Cost of Living Rider.

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 Policyowner choose?

Interest only option

Which nonforfeiture option provides coverage for the longest period of time?

Reduced paid-up

A couple owns a life insurance policy with a Children's Term Rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability?

Proof of insurability is not required.

All of the following are TRUE statements regarding the accumulation at interest option EXCEPT

The interest is not taxable since it remains inside the insurance policy.

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

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

Under an extended term nonforfeiture option, the policy cash value is converted to

The same face amount as in the whole life policy.