Life Insurance Chapter 4 Questions

Five years after the policy was issued, the insurer discovered that the insured was actually older than was stated on the application (but they can pay a reduced amount)

All of the following are situations in which a life insurance company can legally get out of paying a death claim after the insured has died, except:

Extended Term

Jamie has a $200,000 permanent policy and cannot continue making the premium payments. She still, however, wants the peace of mind of being covered for the same $200,000 in death benefit although it may be for an abbreviated period of time. The Nonforfeiture Option Jamie should choose is:

3 year

How long, typically, is the reinstatement period from policy lapse?

Unless specified otherwise, the cash values buy extended term

If the premiums are not paid on a Traditional Whole Life policy that has been in force for decades with no loan outstanding, what happens?

Reduced Paid-up

Beth exercised an owner's option on a life policy to stop paying premiums but continue to be covered until she was age 100. Which Nonforfeiture Option did she choose?

Premium Reduction

Beth owns a 20-Pay Life participating policy. She has decided that the dividends should be applied toward future premiums. Which Dividend Option did she choose?

6

Generally, an insurer may defer the granting of a policy loan for up to ______ months.

Automatic premium loan

All of the following are nonforfeiture values, except _____________

Fixed Period

Which Settlement Option pays for a specified period, regardless of who may receive the payments?

90,000

Albert owned a $100,000 policy that had accumulated a cash value of $20,000, against which he had borrowed $10,000. If he dies with this loan outstanding, his beneficiary will receive which of the following amounts?