Chapter exam to policy provisions options and riders

S buys a $50,000 whole life policy with a $50,000 accidental death and disbursement rider. S dies One year later of natural causes. How much will the insurer pay the beneficiary?

$50,000

P purchases a $50,000 term life insurance policy in 2005. One of the questions on the application ask if P engages in scuba diving, to which P answers "No". The policy is then issued with no scuba exclusions. In 2010, P takes up scuba diving and dies in a scuba-related accident in 2011. What will the insurer pay to P's beneficiary?

$50,000 minus any outstanding policy loans

Which of the following statements is correct about accelerated death benefits

Must have a terminal illness to qualify

P is the insured on a participating life policy. Which statement is true of if P's premiums are waived due to a disability?

P will still receive declared dividends

Which of the following provisions guarantees that premiums will be waived if a juvenile life policy owner becomes disabled

Payor clause

The ____ is Authorized to assign a life insurance policy as collateral for a loan

Policyowner

Which of these nonforfeiture options continue a build up of cash value

Reduced Paid-Up

The provision that can be used to put an insurance policy back in force after it has lapsed due to nonpayment is called

Reinstatement

Which of these provisions require proof of insurability after a policy has lapsed

Reinstatement

J let her life insurance policy lapse 8 months ago due to nonpayment. She can reestablish coverage under which of the following provisions?

Reinstatement provision

Which of these life insurance riders allows the applicant to have excess coverage?

Term rider

How are surrender charges deducted in a life policy with a rear-end loaded provision?

Deducted when the policy is discontinued

The option that provides additional death benefit for a limited amount of time at the lowest possible cost is called a

Accelerated death and disbursement rider

What does the insuring agreement in a life insurance contract establish

An insurer's basic promise

What action can a policy owner take if an application for a bank loan requires collateral?

Assign policy ownership to the bank

P died five years after purchasing a life policy. While investigating the claim, the insurer discovered material misrepresentations made by P during the application process. Which of these actions will the insurer take?

Beneficiary will be paid the Death Benefit

Which writer provides coverage for a child under a parents life insurance policy

Child term rider

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 (ADL's)

All of these statements about the waiver of premium provision are correct except

Insured must be eligible for Social Security disability for claim to be accepted

The agreement in a life insurance contract that states a specific sum of money will be paid to a designated person upon an insured's death is called a(n)

Insuring agreement

In a life insurance contract and insurance company's promise to pay stated of benefits is called the

Insuring clause

All of these Settlement options involve the systematic liquidation of the death proceeds in the event of the insured's death EXCEPT

Interest only

An insured's inability to perform two or more activities of daily living make sugar which type of life policy writer

Long term care

The Consideration clause in a life insurance policy indicates that a policyowner's consideration consist of a completed application and

The initial premium

The free look provision begins

Upon receipt of the policy by the Policyowner

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

Variable Life

Which type of life policy contains a monthly mortality charge as well as self directed investment choices

Variable Universal Life

When a misrepresentation on a life insurance policy application is discovered what action me an insurance company take

Void the policy only if it is discovered during the contestable period and proven to be material

A life insurance policy which ensures that the premium will be paid off if the insured becomes disabled has what kind of rider attached?

Wavier of premium

A return of premium life insurance policy is

Whole life and Increasing term

A cost of living rider gives the insured

additional death benefits