XCEL Chapter 4 continued

What are collateral assignments normally associated with?

Bank loans

Which policy provision protects the policyowner from unintentional lapse of the contract?

Grace period

When does a life insurance policy's waiver of premium take effect

Insured becomes totally disabled

What does the grace period allow a life insurance policyowner to do?

Make a premium payment after the due date without any loss of coverage

Jerry is an insured who understated his age on his life insurance application, paying $12 per $1,000 of insurance instead of $15 per $1,000. If he dies, how will the adjusted death benefit be calculated?

12/15th of the policy's face amount

Which provision will pay a portion of the death benefit prior to the insured's death due to a serious illness?

Accelerated death benefit

If an insured dies because of an accident, which type of life insurance rider will provide additional coverage?

Accidental death rider

Which of these is NOT a valid policy dividend option?

Monthly income payments

A life insurance policy can be surrendered for its cash value under which policy provision?

Nonforfeiture options

How are acts of war considered under a group life insurance policy?

Policy exclusion

What does the guaranteed insurability option allow an insured to do?

Purchase additional coverage with no evidence of insurability required

After a policy has lapsed, which provision allows the insured to continue coverage?

Reinstatement provision

An insurer can be protected from adverse selection with which policy provision?

Suicide clause

When a life insurance policy is surrendered, how does the cost recovery rule apply?

The policy's cost basis is exempt from taxation

Which of the following is NOT a common life insurance policy rider

extended term