chapter exam 2

A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster rate in the early years of the policy. Which of these statements made by the producer would be correct?

20-Pay Life accumulates cash value faster than Straight Life

a long term care rider in a life insurance policy pays a daily benefit in the event of which of the following?

inability of the insured to perform more than 2 activities of daily living

B receives yearly dividends and interest from a participating life insurance policy. Which of these should B include as gross income for federal income tax purposes?

interest only

Which of these are NOT an example of a Nonforfeiture option?

life income

a cost of living rider gives the insured

additional death benefits

B recently died and was insured with a life insurance policy for over five years. during the claims process, the insurer discovered that B had understated his age by five years at the time of application. in this situation the insurer will..

Pay the amount that the premium would have purchased at the correct age.

S would like to use dividends from her life insurance policy to purchase paid-up additions. All of these would be factors that determine how much coverage can be purchased EXCEPTS would like to use dividends from her life insurance policy to purchase paid-up additions. All of these would be factors that determine how much coverage can be purchased EXCEPT

beneficiary's age

The Accidental Death and Dismemberment (AD&D) provision in a life insurance policy would pay additional benefits if the insuredA. dies of natural causes

binded in a accident

Which rider provides coverage for a child under a parent's life insurance policy?

child term rider

Which of these actions is taken when a policyowner uses a Life Insurance policy as collateral for a bank loan?

collateral assignment

N is a student pilot with a large life insurance policy. Which of these features would limit the insurer's obligation in the event N was killed while flying as a student pilot?

exclusion

a nonforfeiture clause gives the policy owner

guaranteed values even if the policy has lapsed

In a life insurance policy, which provision states who may select policy options, designate and name a beneficiary, and be the recipient of any financial benefits from the policy?

owners rights

M had an annual life insurance premium payment due January 1. She died January 10 without making the premium payment. What action will the insurer take?

pay face amount minus the past due premium

the _____ is authorized to assign a life insurance policy as collateral a loan

policy owner

What benefit does the Payor clause on a Juvenile Life policy provide?

premiums are waived if the payor becomes disabled

which of the following is an example of a nonforfeiture option?

reduced paid up-option, cash surrender value, extended term option

what is the suicide provision designed to do?

safeguard the insurer from an applicant who is contemplating suicide

which of these life insurance riders allow the applicant to have excess coverage?

term rider

Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options?

variable life