Utah Life and Health Exam- Chapter 4: Life Insurance Policy Provisions, Options and Riders

Which of the following would be deducted from the death benefit paid to a beneficiary. If a partial accelerated death benefit had been paid while the insured was still alive?

Amount paid with the accelerated benefit, plus the earnings lost by the insurance company in interest income from the accelerated benefit.

An insured receives an annual life insurance dividend check. What term best describes this arrangement?

Cash option.

Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policyowner?

Cash surrender.

Which nonforfeiture option has the highest amount of insurance protection?

Extended term.

J applied for a life insurance policy on January 10. The policy was issued on January 31. J's agent was vacationing at the time the policy was issued, so J did not receive the policy until February 18. J decides that 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?

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

All of the following are dividend options EXCEPT...

Fixed-period installments.

Which is TRUE about the cash surrender nonforfeiture option

Funds exceeding the premium paid are taxable as ordinary income.

What required provision protects against unintentional lapse of the policy?

Grace period.

All of the following are Nonforfeiture options EXCEPT...

Interest only.

All of the following are beneficiary designations EXCEPT...

Specified.

Nonforfeiture values guarantee which of the following for the policyowner?

That the cash value will not be lost.

If a life insurance policy has an irrevocable beneficiary designation...

The beneficiary can only be changed with written permission of the beneficiary.

Which is NOT true about beneficiary designations?

The beneficiary must have insurable interest in the insured.

Under an extended term nonforfeiture option, the policy cash value is converted to...

The same face amount as in the whole life policy.

Which of the following is TRUE about nonforfeiture values?

They are required by state law to be included in the policy.

A rider that may be attached to a life insurance policy that will adjust the face amount based upon a specific index, such as the Consumer Price Index, is called...

Cost of living rider.

All of the following are true regarding the guaranteed insurability rider EXCEPT...

This rider is available to all insureds with no additional premium.

If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a...

Guaranteed insurability rider.

Which of the following factors determines the amount of each installment paid in a Life Income Option arrangement?

Recipient's life expectancy and amount of principal.

Life income joint a survivor settlement option guarantees...

Income for 2 or more recipients until they die.

Which of the following explains the policyowner's right to change beneficiaries, choose options, and receive proceeds of a policy?

Owner's Rights.

An insured will be allowed to reactivate her lapsed life insurance policy if action is taken within a certain period of time, and proof of insurability is provided. Which policy provision allows this?

Reinstatement provision.

Which of the following statements is TRUE about a policy assignment?

It transfers rights of ownership from the owner to another person.

Which of the following statements is TRUE concerning the Accidental Death Rider?

It will pay double or triple the face amount.

Elijah and Mary are to receive the proceeds of a life insurance policy jointly until the first one dies. If either one should die within a specified time, the other one will receive benefits until the end of the specified time. This settlement option is known as:

Joint Life with Term Certain.

Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary?

Life income with period certain.

When a life insurance policy was issued, the policyowner designed a primary and a contingent beneficiary. Several years later, both the insured and the primary beneficiary died in the same car accident, and it was impossible to determine who died first. Which of the following would receive the death benefit?

The insured's contingent beneficiary.

An insured purchases a policy in 2008 and died in 2013. The insurance company discovers at that time the insured concealed information during the application process. What can they do?

Pay the death benefit.

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