Chapter 3 quiz

All of the following are true regarding the guaranteed insurability rider except

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

What provision in an insurance policy extends coverage beyond the premium due date

grace period

A policy owner who is also the insured wants to name her husband as the beneficiary of her life policy. She also wishes to retain all of the rights of ownership. The policy owner should have her husband named as the

Revocable beneficiary

An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy?

$50,000

Under which of the following circumstances would an insurer pay accelerated benefits?

An insured is diagnosed with cancer and needs help paying for her medical treatment

Which of the following protects the insured from an unintentional policy lapse due to nonpayment of premium

Automatic premium loan

Which is true about the cash surrender nonforfeiture option

Funds exceeding the premium paid are taxable as ordinary income.

A father purchases a life insurance policy on his teenage daughter and adds the Payor Benefit rider. In which of the following scenarios will the rider waive the payment of premium?

If the father is disabled for more than 6 months

All of the following are nonforfeiture options except

Interest only

Which of the following settlement options in life insurance is known as street life

Life income

The insured under a $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple indemnity rider in the policy specified that the death must not be contributed to by the insured in any manner. In this case, what will the policy beneficiary receive?

$100,000

Which of the following is true about the mandatory free look in a life insurance policy

It commences when the policy is delivered

What is the name of a clause that is included in a policy that limits or eliminates the death benefit if the insured dies as a result of war or while serving in the military

Military service or war

And insured purchased a life policy in 2010 and died in 2017. The insurance company discovers at that time that the insured had 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 minors parent have died or become disabled

Payor benefit

Which of the following when attached to a permanent life insurance policy, allows the policy owner to customize the policy to provide an additional amount of temporary insurance on the insured or allows amounts of temporary insurance to cover other family members?

Term rider

Nonforfeiture values guarantee which of the following for the policy owner

That the cash value will not be lost

An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?

The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive.

Life income joint and survivor settlement option guarantees

income for 2 or more recipients until they die