Chapter 4 Life insurance Review Pt 2

When a reduced paid up non forfeiture option is chosen, what happens to the face amount of the policy?

It is reduced to the amount of what the cash value would buy as a single premium

All of the following are beneficiary designations except

Specified

The Owner of a life insurance policy wishes to name two beneficiaries for the policy proceeds. What will the soliciting insurance producers say?

The Policyowner can specify the way proceeds are split in the policy.

Under an extended term non forfeiture option, the policy cash value is converted to

The same face amount as in the whole life policy

What kind of policy allows withdrawals or partial surrenders?

Universal life

If a policy has an automatic premium loan provision, what happens if the insured dies before the loan is paid back?

The balance of the loan will be taken out of the death benefit

What type of insurance would be used for a return of premium Rider?

Increasing term

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?

9800$

How long will the beneficiary receive payments under the single life settlement option?

Until the beneficiary's death

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

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

Waiver of premium

What is the waiting period on a waiver of premium rider in life insurance policies?

6 months

what type of insurance would be used for a return of premium rider?

Increasing term

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

One year term option

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

Proof of insurability is not required

Who can make changes once a policy is in effect?

The executive officer of the insurer

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

A rider attached to a life insurance policy that provides coverage on the insured's family members is called

Other insured rider

The provision which states that both the policy and a copy of the application form the contract between the Policyowner and the insurer is called the

Entire contract

What provision in an insurance policy extends coverage Beyond premium due date?

Grace period

The policy owner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policy owner choose?

Interest only option