Policy provisions in life insurance

All of the following are eligible beneficiary designations on a life insurance policy?

1. an old girlfriend 2. a minor child 3. the estate of the insured NOT: the insured

The "grace period" policy provision provides all of the following:

1. continues the policy coverage if the premiums are late 2. protects against an unintentional lapse of coverage 3. is for a period of 31 days for whole life policies NOT: waives the past due premium if the insured dies during the grace period

Regarding the "reinstatement provision", all of the following are true:

1. payment of back premiums plus interest is required 2. must provide evidence of insurability 3. reinstatement must take place within a 3- year period from the lapse date NOT: premiums will be based on the insured attained age

The entire contract provision states all of the following are included in a valid life insurance policy:

1. policy form 2. riders 3. application NOT: Certificate of authority

For a person applying for life insurance, the insurance company may exclude all of the following:

1. student pilot 2. commercial pilot 3. person who flies his own plane NOT: person who frequently flies as a passenger on a commercial airline

In Oklahoma what is the maximum interest allowed to be charged on a policy loan from a whole life policy?

8%

In a life premium policy, what is free look?

a mandatory provision which gives the policy owner time to decide about the policy

Which of the following is true regarding the insured committing suicide within the first two years of the policy?

a return of paid premiums without interest will be paid

All of the following could be excluded from a life insurance policy EXCEPT:

accidental death Excluded: war status aviation accident suicide

The owner of a life insurance policy has the right to transfer all rights to another person. This policy provision is the:

assignment clause

What is the difference between the absolute assignment and the collateral assignment?

collateral assignment is partial and temporary

If the beneficiary designations are not clear, which of the following could occur?

disputes may arise causing delays in payment

A provision allowing the policy owner to inspect the policy and, if the policy owner is not satisfied with the life insurance policy, return the policy for a full refund is known as:

free look

If the primary beneficiary and the contingent beneficiary die before the insured, the insurance proceeds will be paid to:

insured's estate

All of the following are false regarding a collateral assignment of a life insurance policy EXCEPT?

is a limited transfer of rights for a temporary period of time

When a revocable beneficiary is used:

it can be changed at any time by the policy owner

Which of the following statements is NOT correct regarding the entire contract provision?

it makes the policy incontestable after two years

If the insured and the primary beneficiary are both killed in a common accident and the primary beneficiary clearly outlives the insured, the life insurance proceeds will be paid to:

primary beneficiary's estate

Regarding a loan on a whole life insurance policy, how is the interest rate on a whole life policy loan determined?

rate specified in the policy

A standard policy provision excludes coverage for the insured suicide within the first two years of the contract. What is the standard policy provision included in all life insurance policies?

suicide increases the adverse selection for the insurance company

All of the following statements are correct regarding policy loans, EXCEPT?

the loans must be paid back before the insured dies

On the life insurance policy application the insured's age is state as 30. In reality the insured is 32. If the insurance company discovers the mistake while the insured is alive, what will happen?

the premium will be adjust upward

What will the beneficiary receive if the insured commits suicide within the first two years of the policy?

the premiums paid on the policy

Under the common disaster act, if the insured and the primary beneficiary are killed simultaneously in an accident, the following is true:

the primary beneficiary is presumed to have died first