7.4 Standard Provisions part 1

"Joshua's insurance agent delivered his new term life policy to him. Three days later Joshua changed his mind—he no longer wanted the life policy and returned it to his agent. Joshua had paid the initial premium. Under the free-look provision, what is Joshua entitled to receive?

a full refund of the initial premium

Which of the following statements about life insurance is NOT correct?

a policyowner must notify the beneficiary before transferring ownership

All of the following are required provisions in life insurance policies EXCEPT

a replacement provision

Which of the following statements pertaining to reinstatement of a life insurance policy is NOT correct?

a suicide exclusion period is renewed with a reinstated policy

An individual life insurance policy must include all of the following EXCEPT

a table showing the annual loan values of the policy for at least 30 years

To have an individual life insurance policy reinstated, a person must comply with all of the following EXCEPT:

agree to a new policy without another reinstatement provision

Which of the following statements pertaining to the suicide clause in a life insurance policy is NOT correct?

an insured with a $75,000 life insurance policy issued December 15 commits suicide two years later, on December 24th, the beneficiary of the policy will receive a return of the premiums paid for the policy

What happens if, when paying benefits, the insurer discovers that a person's age had been misstated on his individual life insurance application?

benefits will be paid for the amount of coverage the premium would have purchased at the correct age

Which of the following is a required provision in all individual life insurance policies?

reinstatement

Ron, the insured, dies during the grace period for his $100,000 life insurance policy. Considering that the premium on the policy has not been paid, what happens?

the amount of the premium is deducted from the policy proceeds paid to the beneficiary

Vivian commits suicide 4 years after taking out a $100,000 life insurance policy on herself. Her beneficiary is concerned that the death claim will be denied. Which of the following statements is NOT correct?

the company has definite proof of the cause of her death, so it can refuse to pay the death benefit

An exchange of value, consideration, is necessary to form a valid contract. Whose consideration is it, in a contract for insurance, to make truthful statements on an application?

the insured

The purpose of the incontestability provision is to protect

the insured

The incontestability period is usually

the same for both individual and group life insurance policies

All of the following are rights of policy ownership EXCEPT

to determine the method of submitting claims

An insurer may NOT contest an individual life insurance policy after it has been in force for how long?

2 years

Roberta is the insured in a $30,000 life insurance policy for which she pays an annual premium of $700. There is an outstanding policy loan of $2,500. Her last premium due has not been paid, and she dies during the grace period. How much will her beneficiary receive?

$26,800

"Micah pays $220 annually for a $50,000 life insurance policy. The premium is due June 1, however it is not paid until June 24. If Micah died on June 15, what would the amount of the death benefit?

$49,780

A life insurance policy must give the policyowner at least how many days after delivering of the policy to cancel the policy?

10 days

The free look, or right to examine provision allows policyowner the right to review and then return a policy for a full refund within no less than how many days?

10 days

An insured that wants to reinstate a lapsed permanent life policy must do so within

3 years

After Joe died, Well Life Insurance Company discovered that he had misrepresented his health status when he applied for a life insurance policy 7 years ago. The insurer

cannot void or revoke the policy

All of the following policyowner rights contribute to the flexibility of a life insurance policy EXCEPT

classifications of the applicant

In which of the following circumstances would the incontestable clause of an insurance policy apply?

concealment of smoking

An exchange of value is necessary to form a valid contract. What is the legal term that means something of value?

consideration

The contract provision that states that the policy, a copy of the application, and any attached papers constitute the complete insurance contract is the

entire contract provision

Which of the following provisions of a life insurance contract generally helps to keep policies in force if policyowners neglect to pay their premiums?

grace period

All of the following are required provisions in an individual's life insurance contract EXCEPT

home health care

Which of the following statements regarding the grace period for life insurance is NOT correct?

it is usually shorter than 30 days

The policy provision that permits the insurer to adjust benefits because of an incorrect age is

misstatement of age provision

Endorsements or modifications to a contract

must be in writing and agreed to by both the insurer and the policyowner

An insured may apply for reinstatement of a life policy within what period of time after voluntarily surrendering the life policy?

never