Chapter 3.1

An insured receives an annual life insurance dividend check. What term best describes this arrangement?

Cash option

Which of the following information will be stated in the consideration clause of a life insurance policy?

The amount of premium payment

An insured purchased a life policy in 2010 and died in 2017. The insurance company discovers at that time the insured had concealed information during the application process. What can they do?

Pay the death benefit

Which of the following riders would NOT cause the Death Benefit to increase?

Payor Benefit Rider

A policyowner 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 policyowner should have her husband named as the

Revocable beneficiary

If an insured withdraws a portion of the amount amount in the form of accelerated benefits because of a terminal illness, how will that affect the payable death benefit from the policy?

The death benefit will be smaller

An insured had a $10,000 term life policy. The annual premium of $200 was due on February 1; however, the insured failed to pay the premium. He died on February 28. How much would the beneficiary receive from the policy?

$9,800

Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member?

Family term rider

Which of the following is TRUE about nonforfeiture values?

They are required by the state law to be included in the policy.

A couple owns a life insurance policy with a Children's Term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability?

Proof of insurability is not required

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

According to the entire contract provision, what document must be made part of the insurance policy?

Copy of the original application

The type of settlement option which pays throughout the lifetimes of two or more beneficiaries is called

Joint and survivor.

If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a

guaranteed insurability rider

An insured purchased a 15-year level term life insurance policy with a face amount of $100,000. The policy contained an accidental death rider, offering a double indemnity benefit. The insured was severely injured in an auto accident, and after 10 weeks of hospitalization, died from injuries. What amount would his beneficiary receive as a settlement?

$200,000

All of the following are dividend options EXCEPT Fixed-period installments Accumulated at interest Reduction of premium Paid-up addition

Fixed-period installments

Which of the following statements about the instatement provision is true?

It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated.

The dividend option in which the policyowner uses dividends to purchase a term policy for one year is referred to as the

One-year term option

An insured has a continuous premium whole life policy. She would like to use the policy dividends to pay off her policy sooner than would have been possible otherwise. What dividend option could she use?

Paid-up option

Which of the following is TRUE about nonforfeiture values?

They are required by state law to be included in the policy

According to the entire contract provision, what document must be made part of the insurance policy?

copy of the original application

Which of the following is true about the premium on the children's rider in a life insurance policy?

It remains the same no matter how many children are added to the policy

An individual is purchasing a permanent life insurance policy with a face value of $25,000. While this is all the insurance that he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy?

Guaranteed insurability option

The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called

waiver of premium