Life Insurance Policy Provisions, Options and Riders

Which of the following is a characteristic of a revocable beneficiary designation.?

Policyowner can change beneficiary designation anytime without consent of beneficiary

The insured pays $1,200 annually for her life insurance premium. This year, she has accumulated %175 worth of dividends, which she applies to her next premium, thus reducing it to $1,025. What dividend option has the insured chosen?

Reduction of premium

Which of the following terms refers to the transfer of some or all of the ownership rights of a life insurance policy from on individual to another?

Assignment

All the following are nonforfeiture options in life insurance policies EXCEPT

Automatic Premium Loans

Because of an injury, an insured has been unable to work for 7 months. He wasn't able to pay his life insurance policy premium, yet the policy remained in force. The policy includes.

Wavier of premium rider.

All of the following are true regarding the guaranteed insurability rider EXCEPT

It is available automatically, for no extra premium

When a death claim is submitted, the insurer discovered that the insured understated her age on the application for a life policy. What action will the insurer take?

Pay a reduced death benefit based on the insured's actual age.

In order to reinstate a life insurance policy the insured must do all the following EXCEPT

Pay next year's premium

Under what circumstances will the contingent beneficiary receive the death benefit?

If the primary beneficiary dies before the insured

A life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the

Incontestability clause

Which of the following statements is true of both the fixed-period and fixed-amount settlement options?

Both guarantee that the principal and interest will be fully paid out.

Which of the following statements is NOT a standard exclusion in life insurance policies?

Disability

A spouse receives a $5,000 a month util the principal and interest on her husband's life insurance policy have been paid out. Which settlement option did this beneficiary choose?

Fixed amount

Which of the following features allows an insurance policy to remain in force for a specific number of days beyond the premium due date?

Grace period provision

Which of the following is true about the mandatory free-look period in a life insurance policy?

It commences when the policy is delivered