Policy provisions, options and riders

Question 6 of 50 When would a misrepresentation be considered material?

When it may alter the underwriting decision

Question 48 of 50 Which of the two types of policy assignments requires transfer of all ownership rights in the policy to a third party?

Absolute assignment

Question 24 of 50 What are the three nonforfeiture options in life insurance policies?

Cash surrender, reduced paid-up, and extended term

Question 41 of 50 What are the dividend options in life insurance policies?

Cash, reduced premium, accumulation at interest, paid-up additions, paid-up option, one-year term, and acceleration of endowment

Question 1 of 50 What provision in a life insurance policy extends coverage beyond the premium due date?

Grace period

Question 12 of 50 What required provision protects against unintentional policy lapse?

Grace period

Question 30 of 50 In the fixed-period settlement option, how will the number of installments for the death benefit proceeds determine the amount of the installments?

Longer the period, smaller the installment

Question 16 of 50 What settlement options are available in life insurance policies?

Lump-sum/cash, fixed period, fixed amount, life income, interest only

Question 19 of 50 What are the most common exclusions in life insurance policies?

Military service, hazardous occupation, and aviation

Question 43 of 50 What is the name for a life insurance policy rider that provides coverage on the insured's family members?

Other insured rider

Question 4 of 50 What term is used to describe methods of payment of the death benefit to the beneficiary upon the insured's death?

Settlement options

Question 44 of 50 What life policy rider allows the company to forgo collecting the premium if the insured becomes disabled?

Waiver of premium

Question 50 of 50 When will a contingent beneficiary receive death benefit from a life insurance policy?

When the primary predeceases the insured

Question 31 of 50 Which nonforfeiture option is automatically selected by the company if not chosen by the policyowner?

Extended term

Question 45 of 50 Is the beneficiary required to have insurable interest in the insured?

No

Question 28 of 50 What dividend option can increase the death benefit of the existing life policy?

Paid up additions

Question 47 of 50 When can an insurance company use suicide as a defense against paying a death claim?

When it's committed during a specified time usually 2 years

Question 11 of 50 What type of assignment is used to secure the payment of a debt with an existing life insurance policy?

Collateral

Question 2 of 50 What is the purpose of settlement options in life insurance policies?

Determine how death benefit will be paid to beneficiary

Question 34 of 50 Who controls changes in premium payments, face values, and loans in a life insurance policy?

Policyowner

Question 36 of 50 What is the disadvantage of selecting the life income settlement option?

If the beneficiary dies shortly after the payments begin, the balance of the principal will be forfeited.

Question 10 of 50 What are representations on life insurance applications?

Statements made by applicant the best of ones knowledge

Question 5 of 50 What life insurance policy provision prevents an insurer from disputing or denying a claim due to misstatements on the application after a certain period of time?

Incontestability

Question 35 of 50 Which dividend option is automatically selected by the company if not chosen by the policyowner?

Paid up additions

Question 17 of 50 Statements on the application made by an applicant for a life insurance policy are known as what?

Representations