Ch3 Sec 2 Life Provisions

When an insurer issues a policy that refuses to cover certain risks, this is referred to as an -elimination -exclusion -limitation -exception

Exclusion

The Consideration clause in a life insurance policy indicates that a policyowner's consideration consists of a completed application and? -the initial premium -agreeing to a physical examination -delivery of policy -disclosure of any medical conditions

the initial premium

Which rider provides coverage for a child under a parent's life insurance policy? -spouse term rider -base insured rider -payor benefit rider -child term rider

Child term rider

Whose life is covered on a life insurance policy that contains a payor benefit clause? -parent -beneficiary -child -spouse

Child

Which of these actions is taken when a policyowner uses a Life Insurance policy as collateral for a bank loan? -revocable assignment -beneficiary change -irrevocable assignment -collateral assignment

Collateral assignment

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? -entire contract provision -consideration clause -insuring agreement -assignment agreement

Insuring agreement

All of these statements concerning Settlement Options are true except -Increased proceeds can be provided through accumulation of interest -Rapid depletion of proceeds can be avoided -Proceeds can be administered by the insurance company -Only the beneficiary may select

Only the beneficiary may select

J let her life insurance policy lapse 8 months ago due to nonpayment. She can reestablish coverage under which of the following provisions? -Payor clause -Automatic Premium loan provision -Reinstatement provision -Waiver of premium

Reinstatement provision

B owns a Whole Life policy with a guaranteed insurability option that allows him to purchase, without evidence of insurability, stated amounts of? -additional Term Life coverage at any time -additional Term Life coverage at specified intervals -additional Whole Life coverage at any time -additional Whole Life coverage at specified times

additional Whole Life coverage at specified times

When does a Guaranteed Insurability Rider allow the insured to buy additional coverage? -10 year increments -at future dates specified in the contract with proof of insurability required -at future dates specified in the contract with no evidence of insurability required -at any time while policy is active

at future dates specified in the contract with no evidence of insurability required

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? -Straight life accumulates faster than Limited-pay Life -20-Pay Life accumulates cash value faster than Straight Life -Cash value accumulation of both 20-Pay life and Straight Life depend on the insurer's financial rating -20-Pay Life and Straight Life accumulate cash value at the same rate

20-Pay Life accumulates cash value faster than Straight Life

Which of the following Dividend options results in taxable income to the policyowner? -Paid-up Additions -Cash -Accumulation at interest -Reduced Premium

Accumulation at interest

L takes out a life insurance policy and dies 10 years later. During the claim process, the insurer discovers that L had understand her age on the application. Under the Misstatement of Age provision the insurer will? -pay the death benefit in full -adjust the death benefit to an increased amount -adjust the death benefit to a reduced amount -deny the claim

Adjust the death benefit to a reduced amount

What action can a policyowner take if an application for a bank loan requires collateral? -utilize accelerated benefits provision -borrow against policy cash value and use as a down payment -assign policy ownership to the bank -name bank as beneficiary

Assign policy ownership to the bank

The automatic premium loan provision is designed to? -provide a source of revenue to the insurance company -avoid a policy lapse -allow a policyowner to request a policy loan -allow a policyowner to take out additional coverage without evidence of insurability

Avoid a policy lapse

D is the policyowner and insured for a $50,000 life insurance policy. The beneficiary is D's wife. D and his wife divorce and D remarries, transferring ownership of his policy to his new wife. If D dies without making any further changes, to whom will the policy proceeds be paid to? -Ex-wife -Current Wife -Estate -Split equally between the ex-wife and current wife

Ex-wife

In a life insurance contract, an insurance company's promise to pay stated benefits is called the? -insuring clause -consideration clause -entire contract -owner's rights

Insuring clause

Which of these Nonforfeiture Options continue a build-up of cash value? -Waiver of Premium -Extended Term -Reduced Paid-up -Cash Surrender

Reduced Paid-Up

When is the face amount of a Whole Life policy paid? -at the policy's maturity date only -when the insured dies or at the policy's maturity date, whichever happens first -only when the insured dies -when the policy is surrendered

When the insured dies or at the policy's maturity date, whichever happens first

The incontestable clause allows an insurer to? -disallow a change of ownership throughout the Contestable period -disallow a change of beneficiary during the Contestable period -contest a claim at anytime if the cause of death was accidental -contest a claim during the contestable period

contest a claim during the contestable period