FInance quiz 3
What is the waiting period on a Waiver of Premium rider in the life insurance policy?
6 months
The Policyowner says for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this?
Reduction of premium
Which of the following riders is often used in business life insurance policies when the Policyowner needs to change the insured under the policy?
Substitute insured rider
A life insurance policy DOES NOT have a war clause. If the insured is killed during a time of a war, what will the beneficiary receive from the policy?
The full death benefits
A father pwns 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 insured's premium will be waived until she is 21
What is the purpose of a fixed period settlement option?
To provide a guaranteed income for a certain amount of time
All of the following are dividend options except
fixed-period installments (are settlement options)
What type of insurance would be used for a return of premium rider?
increasing term
The sole beneficiary of a life insurance policy dies before the insured. If the policyowner fails to change the beneficiary before the insured's death, the proceeds of the policy will go to
the insured's estate
An insured receives an annual life insurance dividend check. What term best describes this arrangement?
Cash option
An insured receives an annual life insurance dividends check. What term best describes this arrangement?
Cash option
Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the Policyowner?
Cash surrender
All of the following statements concerning dividends are true except
Dividend amounts are guaranteed in the policy
All of the following are true regarding insurance policy loans except
policy loans can be made on policies that accumulate cash value
A couple owns a life insurance policy with a children's term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability
Proof of insurability is not required
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 in the death benefits
Which of the following best describes fixed period settlement option?
Both the principal and interest will be liquidated over a selected period of time
What is the clause that describes the method of paying the death benefit on the event that the insured and beneficiary are both killed in the same accident?
Common Disaster Clause
An individual is purchasing a policy permanent life insurance with a face duke 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
At the time the insured purchased her life insurance policy, she added a rider that will allow her to purchase additional insurance in the future without having to prove insurability. The rider is called
Guaranteed insurability
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