3 - Life Insurance Policies - Provisions, Options and Riders: Policy Provisions, Options and Riders

policy proceeds

M has an insurance policy that also has an outstanding policy loan at the time of M's death. The insurer will deduct the outstanding loan balance from the:

Child Term Rider

Which rider provides coverage for a child under a parent's life insurance policy?

Whole Life and Increasing Term

A Return of Premium life insurance policy is:

20-Pay Life accumulates cash value faster than Straight Life

A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster rate in the early years of the policy. Which of these statements made by the producer would be correct?

Paid-Up Additional Insurance

A young, married teacher has two children and owns a Whole Life policy. If the teacher wants an increasing Death Benefit to protect against inflation, the teacher should select which of the following Dividend Options?

Past due premiums are waved

All of the following statements are true regarding a policy's Grace period, EXCEPT:

The full face amount

D was actively serving in the Marines when he was killed in an automobile accident while on leave. His $100,000 Whole life policy contains a War Exclusion clause. How much will D's beneficiary's receive?

$50,000 minus any outstanding policy loans

P purchases a $50,000 whole life insurance policy in 2005. One of the questions on the application asks if P engages in scuba diving, to which P answers "No". The policy is then issued with no scuba exclusions. In 2010, P takes up scuba diving and dies in a scuba-related accident in 2011. What will the insurer pay to P's beneficiary?

$50,000

S buys a $50,000 whole life policy with a $50,000 Accidental Death and Dismemberment rider. S dies 1 year later of natural causes. How much will the insurer pay the beneficiary?

Automatic Policy Loan

S has a Whole Life policy with a premium payment due soon. Which provision would keep the policy in force if S does not make the required payment and the policy has adequate cash value from which the premium payment can be made?

the initial premium

The Consideration clause in a life insurance policy indicates that a policyowner's consideration consists of a completed application and

Insuring Agreement

The agreement in a life insurance contract that states a specific sum of money will be paid to a designated person upon an insured's death is called a(n):

Must have terminal illness to qualify

Which of the following statements is CORRECT about accelerated death benefits?

Full face amount minus any past due premiums

An insured is past due on his life insurance premium, but is still within the Grace Period. What will the beneficiary receive if the insured dies during this Grace Period?

Term Rider

Which of these life insurance riders allows the applicant to have excess coverage?

Evidence of insurability is required when the option is exercised

Which of these statements about a Guaranteed Insurability Option rider is NOT TRUE?

$50,000

T took out a $50,000 life insurance policy with an Accidental Death and Dismemberment rider. Five years later, T commits suicide. How much will the insurer pay?

Reduced Paid-Up

Which of these Nonforfeiture Options continue a build-up of cash value?

Variable Life

Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options?

Coverage will be adjusted to reflect the insured's true age if a misstatement of age is discovered

Which statement regarding the Misstatement of Age provision is considered to be true?