*chapter four exam questions

An insured has a $25,000 whole life insurance policy with $6000 cash value available under the extended term non-forfeiture option what is the amount of insurance available to the insured

$25,000 The extended term option uses the policies cash value to purchase a level term insurance policy in an amount equal to the policy face value for as long a period as the cash value will purchase

Payor Benefit (rider)

A rider found in juvenile policies which waives the premiums if the person paying them (often the parent) is disabled or dies while the child is still a minor.

Guaranteed Insurability Rider

Allows insured to purchas additional amounts of disability income insurance at future dates - future dates are policy anniversary dates -added coverage can be attained but must prove income increase - AKA Additional Purchase or Future Increase Option

Which statement regarding the waiver for premium rider is accurate

Cash payment is not directly provided to the policy owner

Which statement regarding the waiver of premium rider is accurate

Cash payment is not directly provided to the policyowner

Which of the following is not a condition that must be met for an accidental death benefit to be paid

Cause of death must be from a job related injury

Waiver of Premium

Continuation of life insurance coverage if the insured becomes totally disabled and is unable to pay the premiums.

Which of the following is not guaranteed in a whole life policy

Dividend scale

Scott has a life insurance policy in which the dividends are left with the insurance company. This particular policy may be paid up with the cash value plus accumulated dividends

Equal the net single premium for the face amount at the insureds attained age

Which life insurance policy option allows the policy owner to have coverage equal to the net death benefit of the lapsed policy

Extended term nonforfeiture option

Payor Benefit Rider

Found in juvenile polices which waivers the premiums if the person paying them (often the parent) is disabled or dies while the child is still a minor

What is the name of the writer that provides an additional purchase option in a life insurance policy

Guaranteed insurability rider

Define nonforfeiture

Is an insurance policy clause stating that and insured party can receive full or partial benefits or a partial refund of premiums after a lapse due to non-payment

Which of these would not be a valid reason to add the waiver of premium rider to a life insurance policy

It allows a policy loan to cover premium payments if the policy owner becomes totally disabled

Which of these would not be a valid reason to add the waiver of premium rider to the life insurance policy

It allows a policy loan to cover premium payments if the policyowner becomes totally disabled

Joe is a life insurance policy owner who has failed to pay interest on his policy loan. What will result from this nonpayment

Loan amount is increased to reflect the amount of interest due

Waiver of Premium Rider

Optional rider that requires an insurer to assume payment of premiums should the insured become totally disabled for six months for the duration of the disability.

A life insurance guaranteed insurability rider gives the insured the right without providing insurability to

Periodically purchase additional insurance

What happens to a life insurance policy when the policy loan balance exceeds the cash value

Policy will no longer be in force

How was the insured protected if a payor benefit rider is attached to the life insurance policy?

Premium payments are waived in the event the premium payor dies or becomes disabled

which statement regarding the life insurance premium for a child rider is true

Premium remains the same no matter how many children

The automatic premium loan provision can be accurately described as

Provision that provides a policy loan to pay any premiums by the end of the grace period The automatic premium loan provision authorizes a policy loan to pay an overdue premium at the end of the grace period

What effect in a long-term care benefit rider have on a life insurance policy

Reduced death benefit. If used toward the cost associated with assisted living or nursing home confinement a long-term care benefit will reduce the life insurance policies death benefit

Life insurance policy owner would like a dividend option that results in a limited current outlay of funds. Which dividend option would be chosen

Reduction of premium payment

Which of the following is true regarding a person receiving a waiver of premium benefit

The insured must be disabled for a period of time

What is considered the collateral on a life insurance policy loan

The policies cash value

What happens when a policy owner borrows against the cash value of his life insurance policy?

The policy proceeds would be reduced by the outstanding loan balance

What happens when a policy owner borrows against the cash value of his life insurance policy

The policy proceeds would be reduced by the outstanding loan balance If a life insurance policy owner borrows against the cash value of a policy the outstanding loan balance is deducted from the policy proceeds.

Which of these statements regarding the extended term insurance nonforfeiture option in a life policy is accurate

The premium to purchase the coverage comes from the policies cash value

Life insurance policy that includes a return of premium rider will pay the beneficiary how much upon an insured's death

Total premiums paid plus the policy face amount

Nonforfeiture definition

Under this option the insured returns the policy to the insurance company and the life insurance company pays out the current value of the policy

Return of Premium Rider

Upon death, death benefit is paid + the aggregate of premiums paid to date

After the extended term life nonforfeiture option is chosen the available insurance will be

level term for a stated period of time

When a lapsed policy's premium has been paid current, it has the potential of being

reinstated

Waiver of Premium Rider

should the owner be disabled and cant earn an income, after 6 months, all premiums will be paid by the insurer during the disability period; After 6 months, the premiums will be repaid