Chapter 4: set 3

Which of the following is true regarding a single life settlement option?

It provides income the beneficiary cannot outlive

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

The face amount as in the whole life policy

The paid up addition options uses the dividend

To purchase a smaller amount of the same type of insurance as the original type

How long is the required grace period in life insurance policies in this state?

1 Month

An 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

What is the other term for the cash payment settlement option?

Lump sum

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 individual is purchasing a permanent life insurance policy with a face value of $25000. 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

which of the following explains the Policyowner's right to change beneficiaries, choose options, and receive proceeds of a policy?

Owner's rights

An individual purchased a life insurance policy on his life naming his wife as a primary beneficiary, and their Daughter as contingent beneficiary. Under what circumstances could the daughter collect the death benefit?

If the primary beneficiary predeceases the insured

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 business owner was trying to obtain a bank loan to fund the purchase of a new business facility, but the bank required proof of additional assets to secure the loan. The business owner then decided to use her 250000$ life insurance policy to secure the loan. Which provision makes this possible?

Collateral assignment

During partial withdrawal from a universal life policy, which portion will be taxed?

Interest

The Policyowner 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 Policyowner choose?

Interest only option

A father owns a life insurance policy on his 15 year old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums?

The insureds premiums will be waived till she is 21

An insured owns a $50000 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 $20000. What would be the face amount of the new term policy?

$50000

A father purchases a life insurance 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 six months

What kind of policy allows withdrawals or partial surrenders?

Universal life

Which of the following is true about a class designation?

Beneficiaries are not identified by name.

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

Grace period

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

Other insured rider

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

Until the beneficiary's death

Upon the death of the insured, the primary beneficiary discovers that the insured chose the interest only settlement option. What does this mean?

The beneficiary will only receive payments of the interest earned on the death benefit

Which of the following is not typically excluded from life policies?

Death due to plane crash for a fare paying passenger

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

Revocable beneficiary

Which nonforfeiture option provides coverage for the longest period of time?

Reduced paid up

An insured will be allowed to reactivate her lapsed life insurance policy if action is taken within a certain period of time, and proof of insurability is provided. Which policy provision allows this?

Reinstatement provision