7.4 part 3
Which of the following phrases best describes a life insurance policy under the entire contract clause?
the policy, any amendments or riders, and a copy of the signed application
Which of the following statements pertaining to life policy assignment is NOT correct?
the policyowner must obtain approval from the insurance company before a policy can be assigned
What is the insurer's consideration or exchange of value regarding an insurance policy?
to pay death benefits to the beneficiary when the insured dies
An individual life insurance policy must contain all of the following provisions EXCEPT
accelerated benefit
An assignment in which the assignee receives full control over the policy is called:
an absolute assignment
Tina's grandparents purchased a $250,000 universal life insurance with the intent to permanently transfer ownership to her when she turned 21. What is that transfer of rights known as?
an absolute assignment
Who must sign endorsements, modifications, or any other changes to a life insurance contract?
an executive officer of the company
An individual life insurance policy must become incontestable no later than how long after its effective date?
2 years
All individual life insurance policies must include a reinstatement provision providing that the policy can be reinstated at any time within how many years from the date of premium default?
3 years
Edna stopped paying premiums on her permanent life insurance policy seven years ago though she never surrendered it. She is still insurable and has no outstanding loan against the policy. The company probably will decline to reinstate the policy because the time limit for reinstatement has expired. The limit usually is:
3 years
If a life insurance policy lapses for nonpayment, within how many years from the date of premium default may the policy be reinstated?
3 years
The insurer is generally required to pay the death benefit claim within
60 days
The payment of claims provision states that the insurer will pay the death benefit within how many days after receiving notification of the claim?
60 days
Which of the following statements pertaining to reinstatement of a life insurance policy is CORRECT?
A new contestability period is renewed with a reinstated policy
Which of the following statements pertaining to the insuring clause in a life insurance policy is NOT correct?
It specifies the length of the grace period
Abner's age was misstated in his application for a $50,000 life policy. What will the company do when it discovers the error?
It will adjust either the premium rate or the amount of protection
Suppose a whole life insurance policy was issued on August 3, 1998. On August 31, 2000, the insured committed suicide. What action will the insurer probably take?
Pay the policy's face amount
John purchased a life insurance policy with a $250,000 death benefit at age 32. When John died the insurer discovered that he was really 25 years old at the time of the application. How much will the beneficiary receive?
The death benefit will be increased according to how much coverage the premium John paid would have purchased had he reported his correct age
What action will an insurer take if an interest payment on a policy loan is not made on time?
The face amount will be lowered to reflect the proper amount based on the correct age
Which of the following is NOT a part of what constitutes the entire contract?
The invoice for first month's premium
What happens if a claim arises during the grace period of an individual life insurance policy?
benefits will be paid, but unpaid premiums can be deducted from the policy proceeds
All of the following are rights of policy ownership EXCEPT
changing a provision with the agent's approval
What are the 2 types of assignment of rights to another in a life insurance policy?
collateral and absolute (known as permanent)
Which provision of a life insurance policy states that "no statement shall void this policy or be used in defense of a claim under it unless contained in the application"?
entire contract clause
The mode of premium payment refers to
frequency of payment
The time period between the date when premium is due and when coverage lapses is called
grace period
After an individual life insurance policy has been in effect for 2 years, which of the following is grounds for cancellation?
nonpayment of premium
What can a policyowner do if, 9 days after an individual life insurance policy is delivered, he decides not to keep it?
return it for a full refund of premiums
All of the following statements regarding the insuring agreement are true EXCEPT
the agent or producer must sign the clause
Which of the following is stated in the consideration clause of a life insurance policy?
the amount and frequency of premiums
Which of the following statements about reinstating an individual life insurance policy is CORRECT?
the insured must pay all back premiums with interest premium loans before the policy
"When Mary applied for a life insurance policy, she did not disclose that she had just been treated for cancer 3 months ago. In addition, Mary intentionally misstated her age so that her premiums would be lower. If the insurer issues the policy but discovers the misrepresentations 1 year later,
the insurer can challenge the validity of the contract
The provision that allows a person to select the premium payment mode, settlement options, borrow cash values that have accumulated or cancel the policy is known as
the ownership rights provision
