NWM Chapter 4 pt.2

all of these are standard exclusions found in life insurance policy EXCEPT

Disability

a life insurance policy normally contains a provision that restricts coverage in the event of death under all of the following situations EXCEPT

Fare-paying passenger

Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value. She would like to borrow $15,000 against the cash value. Which of the following statements is TRUE?

Net death benefit will be reduced if the loan is not repaid (if loan is not repaid the death benefit will be reduced by the outstanding loan balance)

Kurt is an active duty serviceman who was recently killed in an accident while home on leave. Which military service exclusion clause would pay upon his death?

Results (results clause states that the insurer is excused from paying the amount only if the death is a result of war)

which of these is considered to be a Living Benefit option in a life insurance policy

accelerated death benefit

Of the following dividend options, which of these is taxable?

accumulation interest

a provision that allows a policyowner to temporarily give up ownership to secure a loan is called a(n)

collateral assignment

a waiver of premium rider allows an insured to waive premium payments if the insured is

completely and permanently insured

In what part of an insurance policy are policy benefits found?

declarations (declarations page is the quick guide to the insurance policy providing basic info to policyholder)

a life insurance policyowner was injured in an automobile accident which results in a total and permanent disability. which rider would pay a monthly amount because of this disability

disability income rider

what is the nam of the provision which states that a copy of the application must be attached to the policy when issued

entire contract

An insurer will accept a premium from the insured and continue the coverage in full force as though it was NOT late during which time period?

grace period

a life insurance rider that allows an individual to purchase insurance as they grow older, regardless of insurability, is called a(n)

guaranteed insurability rider (designed to permit young individuals to be able to purchase insurance as they grow older)

which of the following protects a policyowner from a misrepresentation caused by an innocent mistake

incontestable clause (protect the policyowner from a misrepresentation caused by their own innocent mistake)

which of these is NOT considered to be a nonforfeiture option in a whole life insurance policy

interest only

which of these is NOT considered to be a common life insurance nonforfeiture option

life income annuity

a guaranteed issue insurance policy has no

medical underwriting

The suicide clause of a life insurance policy states that if an insured commits suicide within a stated period from the policy's inception, the insurer will only be liable for a return of premiums paid

minus indebtedness and without interest (the insurer will be liable for a return of premium paid minus indebtedness and without interest)

a whole life policy option where extended term insurance is selected is called a(n)

nonforfeiture policy

in order to activate the reinstatement clause of a lapsed life insurance policy, the insured MUST

provide evidence of insurability to the insurer

all of the following are considered to be nonforfeiture options available to a policyowner EXCEPT

reduction of premium

a policyowner may excuse which of these dividend options that uses the dividend to pay all or part of the next premium

reduction of premium dividend option

which of these is NOT a characteristic of the Accelerated Death Benefit option

the benefit can be offered as a rider at a specific extra cost or at no cost

James is the insured on a life insurance policy where his age was misstated on the application. Which of the following is CORRECT regarding the death benefit amount?

the death benefit paid will be what the premium would have purchased at the correct age

Loans obtained by a policyowner against the cash value of a life insurance policy

would not be treated as taxable income