Ch. 4 — life provisions

If an insured's age on a life policy has been misstated, what is the insurer's liability if the insured dies?

A prorated death benefit based on the amount of the insurance the insured's premiums would have been if purchased at the correct age.

Which of the following is considered to be an alternative to a life settlement

Accelerated death benefit rider

Of the following dividend options, which of these is taxable?

Accumulation at interest

What is the name of the provision which states that a copy of the application must be attached to the policy when issued

Entire Contract

A life insurance rider that allows an individual to purchase insurance as the grow older, regardless of insurability, is a called a(n)

Guaranteed insurability rider

Barbara's policy includes a rider which allows her to purchase additional insurance at specific dates or events without evidence of insurability. This rider is called a(n)

Guaranteed insurability rider

Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value. She would like to borrow $15,000 against the cash value. Which of the following statements is TRUE?

Net death benefit will be reduced if the loan is not repaidq

What is an insurer required to do when faced with an error made under the misstatement of Age provision?

Pay age-corrected benefits

Under a life insurance policy, what does the insuring clause state?

The insurer's obligation to pay a death benefit upon an approved death claim

Pat owns a 20-pay life policy with a paid-up dividend option. Which of the following statements is true?

The policy may be paid up early by using policy dividends

All of the following riders can increase the death benefit amount EXCEPT

Waiver of Premium

A provision that allows a policyowner to temporarily give up ownership rights to secure a loan is called a(n)

collateral assignment

Ownership of a life insurance policy may be temporarily transferred with a(n)

collateral assignment

A waiver of premium rider allows an insured to waive premium payments if the insured is

completely and permanently disabled

A guaranteed issue policy has no

medical underwriting

A provision in a whole life policy that allows a policyowner to terminate the policy in return for a reduced paid-up policy of the same type is called a(n)

nonforfeiture provision

The two major actions required for a policyholder to comply with the Reinstatement Clause are

provide evidence of insurability, pay past due premiums

Kurt is an active duty serviceman who was recently killed in an accident while home on leave. Which military service exclusion clause would pay upon his death?

results

A life insurance policy owner does NOT have right to

revoke an absolute assignment

A whole life insurance policy accumulates cash value that becomes

the policy loan value which the insured may borrow against