Chapter quiz life insurance policy provisions, options and riders

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In order to reinstate a life insurance policy the insured doesn't have to

Pay next years premium in advance

A life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the

incontestability clause (2 years)

What is NOT a non forfeiture option in life insurance policies?

Automatic premium loans

What statement is true of both fixed period and fixed amount settlement options

Both guarantee that the principal and interest will be fully paid out

What is true about the mandatory free look period in a life insurance policy

It begins when the policy is delivered

What is not true regarding the guaranteed insurability rider

It is available automatically, for no extra premium

When a death claim is submitted, the insurer discovered that the insured understated her age on the application for a life policy. What will the insurer take?

Pay a reduced death benefit based on the insureds actual age

What is a characteristic of a revocable beneficiary designation

Policyowner can change beneficiary designation anytime without consent of beneficiary

The insured pays $1,200 annually for her life insurance premium. This year, she has accumulated $175 worth of dividends, which she applies to her next premium, thus reducing it to $1,025. What dividend option has the insured chosen?

Reduction of premium

How long is the waiting period on a waiver of premium rider in life insurance policies

6 months

What term refers to the transfer of some or all of the ownership rights of a life insurance policy from one individual to another

Assignment

What is not a standard exclusion in life insurance policies

Disability

A spouse receives $5,000 a month until the principle and interest on her husband"s life insurance policy have been paid out. Which settlement option did this beneficiary choose?

Fixed amount

What feature allows an insurance policy to remain in force for a specific number of days beyond the premium due date

Grace period provision

Under what circumstances will the contingent beneficiary receive the death benefit

If the primary beneficiary dies before the insured


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