Life Insurance Policies - Provisions, Options and Riders Chapter Exam 2

Whose life is covered on a life insurance policy that contains a payor benefit clause?

Child

The automatic premium loan provision is designed to

avoid a policy lapse

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

The initial premium

T took out a $50,000 life insurance policy with an Accidental Death and Dismemberment rider. Five years later, T commits suicide. How much will the insurer pay?

$50,000

Which of these is NOT considered to be a right given to a policyowner?

Modify a provision in the insurance contract

Claims are denied under the Suicide clause of the policy

Pay face amount minus the past due premium

How do life insurance companies handle cases where the insured commits suicide within the contract's stated Contestable period?

Claims are denied under the Suicide clause of the policy

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

Accidental Death and Dismemberment rider (AD&D)

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 may 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 if the insured becomes disabled has what kind of rider attached?

Waiver of Premium

The incontestable clause allows an insurer to

contest a claim during the contestable period

What is the Suicide provision designed to do?

safeguard the insurer from an applicant who is contemplating suicide

K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary?

$20,000 death benefit

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

Premiums are waived if payor becomes disabled