Life Insurance Policy Provisions - Chapter 5 Quiz
Which of the following is considered to be an alternative to a life settlement?
Accelerated death benefit rider
Of the following dividend options, which of these is taxable?
Accumulation at interest
An error was made on Mary's life insurance application. Which of the following areas do errors commonly occur on applications and for which the incontestable clause does NOT apply?
Age
What is the name of the provision which states that a copy of the application must be attached to the policy when issued?
Entire Contract
An insurer will accept a premium from the insured and continue the coverage in full force as though it was NOT late during which time period?
Grace period
What is the purpose for having an accelerated death benefit on a life insurance policy?
It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill
Which of these is NOT considered to be a common life insurance nonforfeiture option?
Life income annuity
Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value. She would like to borrow $15,000 against the cash value. Which of the following statements is TRUE?
Net death benefit will be reduced if the loan is not repaid
What is an insurer required to do when faced with an error made under the Misstatement of Age provision?
Pay age-corrected benefits
Which type of rider will waive the premium on a child's life insurance policy if the parent paying the premium dies?
Payor benefit
Which situation accurately describes a reduced paid-up nonforfeiture option?
Policy has a decreased face amount
All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT
Reduction of Premium
A policyowner may exercise which of these dividend options that uses the dividend to pay all or part of the next premium due?
Reduction of premium dividend option
Kurt is an active duty serviceman who was recently killed in an accident while home on leave. Which military service exclusion clause would pay upon his death?
Results
James is the insured on a life insurance policy where his age was misstated on the application. Which of the following is CORRECT regarding the death benefit amount?
The death benefit paid will be what the premium would have purchased at the correct age
Ownership of a life insurance policy may be temporarily transferred with a(n)
collateral assignment
The automatic premium loan provision authorizes an insurer to withdraw from a policy's cash value the amount of
past due premiums that have not been paid by the end of the grace period
In order to activate the reinstatement clause of a lapsed life insurance policy, the insured MUST
provide evidence of insurability to the insurer
The two major actions required for a policyholder to comply with the Reinstatement Clause are
provide evidence of insurability, pay past due premiums
If an insured dies during the grace period with no premiums paid
the policy would be payable, minus the premium amount
