Chapter Exam: Life Premiums and Benefits

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When can a policy-owner change a revocable beneficiary?

Anytime

What kind of life insurance beneficiary requires his/her consent when a change of beneficiary is made?

Irrevocable beneficiary

Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary?

Life Income

A whole life insurance policy-owner does not wish to continue making premium payments. Which of the following enables the policy-owner to sell the policy for more than its cash value?

Life settlement contract

P and Q are married and have three children. P is the primary beneficiary on Q's Accidental Death and Dismemberment (AD&D) policy and Q's sister R is the contingent beneficiary. P, Q, and R are involved in a car accident and Q and R are killed instantly. The Accidental Death benefits will be paid to

P: the person who survived

On a life insurance policy, who is qualified to change the beneficiary designation?

Policy-owner

Who has the right to change a revocable beneficiary?

Policy-owner

Which premium schedule results in the lowest cost to the policy-owner?

Annual

What is the underlying concept regarding level premiums?

The early years are charged more than what is needed.

T and S are named co-primary beneficiaries on a $500,000 Accidental Death and Dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive?`

$0 Because the sole beneficiary is still alive

Which of these is NOT an element of Life insurance premiums?

Morbidity rate

Which statement is true regarding a minor beneficiary?

Normally, a guardian is required to be appointed in the Beneficiary clause of the contract.

K is the insured and P is the sole beneficiary on a life insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true?

Proceeds will be payable to K's estate if P dies within a specified time.

J chooses a monthly premium payment mode on his Whole Life insurance policy. Which of these statements is correct?

The gross premium is higher on a monthly payment mode as compared to being paid annually

A level premium indicates:

The premium is fixed for the entire duration of the contract.


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