Life Policy Provisions, Riders, and Options

Which is not true about the guaranteed insurability rider?

This rider is available to all insured with no additional premium

Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled?

Payor benefit

The two types of assignments are:

Absolute and collateral

A business owner was trying to obtain a bank loan to fund the purchase of a new business facility, but the bank required proof of additional assets to secure the loan. The business owner then decided to use her $250k life insurance policy to secure the loan. Which provision makes this possible?

Collateral assignment

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

Universal Life

The provision which states that both the policy and a copy of the application form the contract between the policy owner and the insurer is called the?

Entire Contract

The 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

When an insured under a life insurance policy died, the designated beneficiary received the face amount of the policy as well as a refund of all of the premiums paid - which rider is attached to the policy?

Return of Premium

Which of the following determines the length of time that benefits will be received under the Fixed-Amount settlement option?

Size of each installment

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

If the primary beneficiary predeceases the insured

An insured has a continuous premium whole life policy. She would like to use the dividends to pay off her policy sooner than would have been possible otherwise. What dividend option could she use?

Paid-Up Option

J applied for a life insurance policy on Jan. 10. The policy was issued on Jan. 31. His agent was vacationing at the time the policy as issued, so he did not receive the policy until Feb.18. J decided he does not want the policy. When would J need to return the policy to the insurer in order to receive a full refund of premium paid?

Feb. 28, or 10 days after the time the policy is delivered.

Z falls from the roof of his house while fixing it and damages his spinal column enough to render him disabled for a year. His insurance policy carries a Disability Income Benefit rider. What benefits will Z receive?

Monthly premium waiver and monthly income

According to the Entire Contract Provision, a policy must contain?

A copy of the original application for insurance

The sole beneficiary of a life insurance policy dies before the insured. If the policy owner fails to change the beneficiary before the insured's death, the proceeds of the policy will go to?

The insured's estate

What is the advantage of reinstating a policy instead of applying for a new one?

The original age is used for premium determination

A rider attached to a life insurance policy that provides coverage on the insured's family members is called the?

Other-insured rider

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

Reduced Paid-Up

The insured under a $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple indemnity rider in the policy specifies that the death must not be contributed to by the insured in any manner. In this case, what would the policy beneficiary receive?

$100,000

Which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium?

Automatic premium loan

Nonforfeiture values guarantee which of the following for the policy owner?

That the cash value will not be lost

An insured has chosen join and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?

The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive