Provisions, options, Riders

If the policyowner, the insured, and the beneficiary under a life insurance policy are three different people, who has the ownership rights?

Policyowner

Which of the following is true of a children's rider added to an insured's permanent life insurance policy?

It is term coverage that is convertible to permanent insurance at or prior to the child reaching the maximum coverage age.

Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled?

Payor Benefit

An insured just died. The insured's beneficiary promptly sent the insurer proof of death. According to Arizona law, this insurer may now establish a period of time during which the settlement will be made. What is the greatest amount of time the insurer can mandate for this particular period?

2 months

Which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium?

Automatic premium loan

The accelerated benefits provision will provide for an early payment of the death benefit when the insured

Becomes terminally ill.

Which of the following best describes fixed-period settlement option?

Both the principal and interest will be liquidated over a selected period of time.

An insured receives an annual life insurance dividend check. What term best describes this arrangement?

Cash option

What limits the amount that a policyowner may borrow from a whole life insurance policy?

Cash value

What is the clause that describes the method of paying the death benefit in the event that the insured and beneficiary are both killed in the same accident?

Common Disaster Clause

What happens when a policy is surrendered for its cash value?

Coverage ends and the policy cannot be reinstated.

Which nonforfeiture option has the highest amount of insurance protection?

Extended Term

What type of insurance would be used for a Return of Premium rider?

Increasing Term

During partial withdrawal from a universal life policy, which portion will be taxed?

Interest

What is the other term for the cash payment settlement option?

Lump sum

After a back injury, an insured is disabled for a year. His insurance policy carries a Disability Income Benefit rider. Which of the following benefits will he receive?

Monthly premium waiver and monthly income

A rider attached to a life insurance policy that provides coverage on the insured's family members is called the

Other-insured rider.

An insured has a life insurance policy from a participating company and receives quarterly dividends. He has instructed the company to apply the policy dividends to increase the death benefit. The dividend option that the insured has chosen is called

Paid-up additions.

An insured has a continuous premium whole life policy, She would like to use the policy dividends to pay off her policy sooner than would have been possible otherwise. What dividend option could she use?

Paid-up option

Which option is being utilized when the insurer accumulates dividends at interest and then uses the accumulated dividends, plus interest, and the policy cash value to pay the policy up early?

Paid-up option

An insured purchased a life policy in 2010 and died 2020. The insurance company discovers at that time that the insured had misstated information about her insurance history on the application. What will the insurer do?

Pay the death benefit

An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident, and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do?

Pay the full death benefit and refund excess premium

A couple owns a life insurance policy with a Children's Term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability?

Proof of insurability is not required.

Which nonforfeiture option provides coverage for the longest period of time?

Reduced paid-up

When an insured under a life insurance policy died, the designated beneficiary received the face amount of the policy, as well as a refund of all of the premiums paid. Which rider is attached to the policy?

Return of premium

A policyowner who is also the insured wants to name her husband as the beneficiary of her life policy. She also wishes to retain all of the rights of ownership. The policyowner should have her husband named as the

Revocable beneficiary.

What is the advantage of reinstating a policy instead of applying for a new one?

The original age is used for premium determination.

The owner of a life insurance policy wishes to name two beneficiaries for the policy proceeds. What will the soliciting insurance producer say?

The policyowner can specify the way proceeds are split in the policy.