Policy provisions, riders, and options

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

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

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

a fixed amount

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

Assignment

If a life insurance policy has an irrevocable beneficiary designation,

The beneficiary can only be changed with written permission of the beneficiary

The insured usually pays $1,200 annually for her life insurance premium. This year, she has accumulated $175 in dividends, and applied that to her next premium, reducing it to $1,025. What dividend option has the insured chosen?

Reduction of premium

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

It starts when the policy is delivered

All of the following are nonforfeiture options in life insurance policies EXCEPT

Automatic premium loans

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

Incontestability clause

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

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

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

it is available automatically, for no extra premium

Which provision of a life insurance policy states that the application is part of the contract?

Entire Contract

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

Grace period provision

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

If the primary beneficiary dies before the insured

The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called

Waiver of Premium

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

disability