Chapter 4: Exam 2 Life Provisions

Which dividend option would an insurer invest the policyowner's money and add any interest earnings as the dividends accrue?

Accumulation at interest Option

Of the following dividend options, which of these is taxable?

Accumulation of interest

An error was made on Mary's life insurance application. Which of the following areas do errors commonly occur on applications and for which the incontestable clause does NOT apply?

Age

Which of the following is NOT part of an insurance contract?

Certificate of Authority

Which of these limit company's liability to provide insurance coverage?

Exclusion

Barbara's policy includes a rider which allows her to purchase additional insurance at specific dates or events without evidence of insurability. This rider is called a(n)

Guaranteed insurability rider

Which type of rider will waive the premium on a child's life insurance policy if the parent paying the premium dies?

Payer benefit

Which situation accurately describes a reduced pad-up nonforfeiture option?

Policy has a decreased face amount

Which of the following is reinstatement condition?

Proof of insurability

Kurt is an active duty service man who recently killed in an accident while home on leave. Which military service exclusion clause would pay upon his death?

Results

All of these are common exclusions to a life insurance policy EXCEPT

accidental death

A waiver of premium rider allows an insured to waive premium payments if the insured is

completely and permanently disabled

The two major actions required for a policy holder to comply with the Reinstatement Clause are

Provide evidence of insurability, pay past due premiums

A policy owner may exercise which of these dividend options that uses the dividend to pay all or part of the next premium due?

Reduction of premium dividend option

Which of these is NOT a characteristic of the Accidental Death Benefit option?

The benefit can be offered as rider at a specific extra cost or may be at no cost

Under a life insurance policy, what does the insuring clause state?

The insurer's obligation to pay death benefit upon an approved death claim

A whole life policy option where extended term insurance is selected is called a(n)

nonforfeiture option

A provision that allows a policyowner to withdraw a policy's cash value interest free is a(n)

partial surrender

The automatic premium loan provision authorizes an insurer to withdraw from a policy's cash value the amount of

past due premiums that have not been paid by the end of the grace period

An insured individual and the policy's beneficiary die from same accident. The common disaster provision states the insurer will continue as if

the Insured outlived the beneficiary