Policy Provisions
The Accelerated Death Benefit provision in a life insurance policy is also known as a(n):
A. 1035 Exchange B. Inter vives grt C. Non-Forfeiture option D. Living Benefit
The Accidental Death and Dismemberment provision in a life insurance policy would pay additional benefits if the insured :
A. Dies of natural causes B. Becomes Critically Ill C. Become chronically ill D. Is blinded in an accident
D owns a Whole Life policy that was purchased 10 years ago. If the premium payments suddenly stop and D takes no additional action, which Nonforfeiture Option will the insurer likely proceed with?
A. Extended Term B. Loan Provision C. Reduced Paid- Up D. Cash Surrender
A policy loan is made possible by which of these life insurance policy features ?
A. Extended Term Provision B. Cash Value Provision ( CORRECT ) C. Owners rights provision D. Consideration Clause
Which of the following provisions guarantees that premiums will be waived If a juvenile Life policy becomes disabled ?
A. Family maintenance clause B. Payor Clause C. Assignment Provision D. Automotive Premium Loan Provision
A(n) ___ rider mat be used to include coverage
A. Payor B. Term C. Conversion D. Parent
Additional coverage can be added to a Whole Life policy by adding a(n)
A. Payor Rider B. Accelerated Benefit Rider C. Decreasing Term Rider D. Automatic Premium Loan Rider
The Automatic Premium Loan Provision is Designed to
A. Provide a source of revenue to the insurance company B. Avoid Policy Lapse C. Allow policyowner to request a policy loan D. Allow a policy owner to take additional carriage without evidence
An insured is past due on his life insurance premium, but is still within the Grace Period. What will the beneficiary receive if the insured dies during this Grace Period?
A. Refund of all premium paid interest B. Refund of all premiums paid C. Full face amount minust past due premiums
The provision that can be used to put on insurance policy back in force after it has lapsed due to nonpayment is called:
A. Reinstatement B. Grace Period C. Automatic Premium Loan D. Waiver of Premium
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?
A. Return of premiums Paid B. Cash value plus interest C. $20,000 death benefit D. Face amount plus interest
Which of these is NOT considered to be a right given to a policy owner ?
A. Surrounding the policy cash value B. Modify a provision in the insurance contract C. Assignment of ownership D. Change the beneficiary, if revocable
A cost of living rider gives the insured
A. Tax Incentives B. Mostly Income C. Decreasing Premiums D. Additional Death Benefit
An insurer may normally delay the payment of a cash value loan or surrender value for up to
A. 2 months B. 4 months C. 6 months D. 8 months
A return of Premium life insurance policy :
A. A nonforfeiture option B. Whole life and increasing term ( CORRECT ) C. Interest- Sensitive D. Variable Life
All of these statements about the Waiver of Premium provision are correct EXCEPT
A. A waiting period must pass before becoming elgible for benfits B. Waiver of premium is available an both permanent and term insurance policy C. Insured must be eligible for Social Security disability fo children to be accepted
S buys a $10,000 Whole Life policy in 2003 and pays an annual premium of $100. S dies 5 years later in 2008 and the insurer pays the beneficiary $10,500. What kind of rider did S include on the policy?
A. Accelerated death benefit rider B. Return of Premium Rider C. Family income Rider D. Term rider
B owns a Whole Life policy with a guaranteed insurability option that allows him to purchase, without evidence of insurability, stated amounts of
A. Additional Term life coverage to any time B. Additional Term life cover at anys specific time C. Additional Whole life coverage at any time D. Additional Whole life coverage at specified time
What benefit does the Payor clause on a Juvenile Life policy provide?
A. Allow payor to assign ownership in the event pay to B. Allow payor to increase face amount without providing C. Premiums are waived if juvenile becomes disabled D. Premiums are waived if payor become disabled
What benefit does the Payor clause on a Juvenile Life policy provide?
A. Allows payor to assign ownership in the event payor becomes disabled. B. Allows payor to increase face amount without providing evidence of insurability C. Premiums are waived if juinile becomes disabled D. Premiums are waived if payor becomes disabled
What does the insuring agreement in a Life insurance contract establish?
A. An insurer basic promise B. The insurance policy grace period C. An insurer's required reserve amount D. The obligations of the beneficiary
What provision in a life insurance policy states that the application is considered part of the contract ?
A. Application Provision B. Policy Exclusion Provision C. Entire Contract Provision D. Incontestability Provision
S has a Whole Life policy with a premium payment due soon. Which provision would keep the policy in force if S does not make the required payment and the policy has adequate cash value from which the premium payment can be made?
A. Automatic Policy Loan B. Assignment C. Grace Period D. Waiver of Premium
What action will the insurer take if an interest payment on a policy loan is not made on time?
A. Automatically add the amount of interest due to the loan balance B. Subtract from dividends owed C. Disallow any Further Loan
Which of the following Nonforfeiture offers the highest death benefit?
A. Cash Surrender B. Reduced Paid up C. Extended Term D. Dividend
M has an insurance policy that also has an outstanding policy loan at the time of M's death. The insurer will deduct the outstanding loan balance from the
A. Cash Value B. Estate of the insured C. Policy proceeds D. Nonforfeiture Value
How do life insurance companies handle cases where the insured commits suicide within the contract's stated Contestable period?
A. Claims are denied under the suicide clause of the policy B. Company pays twice the face amount under the double C. Claims are paid in full D. Premium's are returned under the consideration clause
N is covered by a Term Life policy and does not make the required premium payment which was due August 1. N dies September 15. What action will the insurer take?
A. Claims will be denied B. Claims will be paid in Full C. Claim will be partially paid D. Claim will be decided by or artet atraer
M had an annual life insurance premium payment due January 1. She died January 10 without making the premium payment. What action will the insurer take?
A. Collect premiums from M estate B. Deny the claim C. Pay face amount minus the past due premiums D. Subtract past due premium from cash value
Which of these statements by about a Guaranteed Insurability Option RIder is NOT TRUE ?
A. Coverage can be added at specific events such as have a child B. Evidence of insurability is not required when the option is C. Evidence of Insurability is required when the option is excused D. Coverage can be added at specific ages
Which statement regarding the misstatement of age provision is considered to be true ?
A. Coverage will be adjusted to reflect the insured age if B. Requires a new policy C.Mistatement of age D. Insurer may void if a misstatement age is discovered
A long term care rider in a life insurance policy pays a daily benefit in the event of which of the following?
A. Critical Illness B. Terminal Illness C. Inability of the insured to perform more than 2 activities of Daily Living (ADL'S) D. Inability of the insured to maintain insurance premiums due to unemployment
Which life insurance rider typically appears on a Juvenile life insurance policy?
A. Decreasing Term Rider B. Inflation Rider C. Payor Benefit Rider D. Waiver of Premium Rider
A policy loan is made possible by which of these life insurance policy features ?
A. Extended Term Provision B. Cash Value Provision C. Owners Rights Compromise D. Consideration Clause
A life insurance policyowner would life to take out a policy loan against the cash value in his Whole life policy. The interest rate applied to this loan may vary overtime. This is referred to as a(n) rate loan
A. Fluctuating B. Fixed C. Variable D. Increasing
Which of these provisions require proof of insurability after a policy has lapsed ?
A. Insuring B. Conversion C. Reinstatement D. Consideration
Which type of life policy contains a monthly mortality charge as well as self-directed investment choices?
A. Joint Life B. Adjustable Life C. Variable Universal Life D. Universal Life
K's whole life insurance policy lapsed two months ago due to nonpayment. She would now like to reinstate the policy. All of these statements are correct about the policy's reinstatement EXCEPT
A. K must reinstate with a stated period B. K must pay back interest and premiums C. K will forfeit the right to use automatic loan provision upon reinstatement D. K must spoke evidence of insurability
N is a short pilot with a large life insurance policy. Which of these features would limit the insurer's obligation in the event N was killed while flying as a student pilot
A. Misrepresentation B. Exclusion C. Collateral Assignment D. Concealment
N is a student pilot with a large life insurance policy. Which of these features would limit the insurer's obligation in the event N was killed while flying as a student pilot?
A. Misrepresentation B. Exclusion C. Collateral Assignment D. Concealment
Which of these type of life insurance allows the policyowner to have level premiums and to also choose from a selection of Investment Options?
A. Modified Whole Life B. Variable Life C. Universal Life D. Adjustable Life
A policyowner may generate taxable income from which of the following Dividend Options?
A. Nonforfeiture B. Cash C. Accumulation at Interest D. Reduced Premium
A policyowner may generate taxable income from which of the following Dividend Options?
A. Nonforfeiture B. Cash C. Accumulation at Interest D. Reduced Premium
K owns a Whole Life policy. If K wants an increasing Death Benefit to protect against inflation, which Dividend Option should she chose?
A. Paid up additional Insurance B. Cash option C. Reduced Premiums D. Accumulate with interest
Whole life is covered on a life insurance policy that contains a payor benefit clause ? ( CHILD)
A. Parent B. Beneficiary C. Child D. Spouse
Which of these following statements about accumulated interest earned on dividends from an insurance policy is TRUE ?
A. Partially taxable B. Tax deductible C. Nonforfeiture D. Taxed as ordinary Income ( CORRECT)
L takes out a life insurance policy and dies 10 years later. During the claim process, the insurer discovers that L had understated her age on the application. Under the Misstatement of Age provision, the insurer will
A. Pay the death benefit in full B. Adjust the death benefit to the increased amount C. Adjust the death benefit to a reduced amount D. Deny the claim
J let her life insurance policy lapse 8 months ago due to nonpayment. She can reestablish coverage under which of the following provisions?
A. Payor Clause B. Automatic Loan Provision C. Reinstatement Premium D. Waiver of Provision
Typically a life insurance death benefit is paid by a lump-sum payment. A(n) __________ option is a method of distributing a Life Insurance policy's death benefit OTHER than by a lump sum payment.
A. Settlement B. Dividend C. Conversion D. Aleatory
Which rider provides coverage for a child under a parent's life insurance policy?
A. Spouse Term Rider B. Base Insured Rider C. Payor Benefit Rider D. Child term Rider
The consideration clause in a life insurance contact contains pertinent information ?
A. Summary of benefits B. Offer and Acceptance C. Entire Contract D. Amount of premium payments and when they are due ( CORRECT)
Which of the following statements are CORRECT about accelerated death benefits?
A. The full face amount is available as an accelerated benefit B. Those on Social Security automatically qualify for this benefit. C. This provision is usuallly provided with an increase in premium D. Must have a terminal illness to qualify
The advantage of reinstating an original life policy is
A. The premiums are based on the current age of the B. The premiums are based on the younger age ? C. The interest charged an policy loans will be lowered D. A new contestable period will began
What action can a policy owner take if an application for a bank loan required collateral?
A. Utilize accelerated benefits provision B . Borrow against policy cash value and use a down payment. C. Assign policy ownership to the bank D. Name bank as beneficiary
L takes out a life insurance policy and dies 10 years later. During the claim process, the insurer discovers that L had understated her age on the application. Under the Misstatement of Age provision, the insurer will
A. pay the death benefit in full B. Adjust the death benefit to an increased amount C. Adjust the death benefit to a reduced amount D. Deny the claim
What is the Suicide provision designed to do?
A. safeguard the insurer from an applicant who is contemplating suicide ( CORRECT ) B. Decline an applicant who is contemplating suicide C. Protect the insurer from ever paying a claim that results a suicide D.Allow the insurer an option to pay death benefit for suicide
How do life insurance companies handle cases where the insured commits suicide within the contract's stated Contestable period?
CLAIMS ARE DENIED
