Chapter 3: life policy provisions, riders, and options

all of the following are dividend options EXCEPT

Fixed period installments

which describes fixed period settlement option?

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

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

wavier of premium

what is true about a spouse term rider?

The rider is usually level term insurance

an insured had a $100,000 term life policy. annual premium of $200 was due on Feb 1 however, the insured failed to pay the premium. He died on feb 28. How much would the beneficiary recieve from the policy?

$9,800 (10,000-200)

T purchased a 15 year level term life insurance policy with face amount of $100,000. the policy contained and accidental death rider, offering a DOUBLE INDEMNITY BENEFIT. the insured was severely injured in an auto accident, and after 10 weeks in the hospital he died from injures. What amount would his beneficiary receieve as a settlement?

$200,000 (key word in this question is DOUBLE INDEMNITY BENEFIT-- $100,000 x 2

T is purchasing a permanent life insurance policy with a face value of $25,000. While this is all the insurance that he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy?

Guaranteed insurability option

What type of insurance would be used for a return of premium rider?

Increasing term

Life Income Joint and Survivor option guarantees

income for 2 or more recipients until they die

which is true of a children's rider added to an insureds 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

what is the term for how frequently a policy owner is required to pay the policy premium?

mode

The dividend option in which the policyowner uses dividends to purchase a term policy for one year is referred to as the

one- year term option

the ownership provision entitles the policy owner to do all of the following EXCEPT?

set premium rates

if an insured withdraws a portion of the face amount in the form of accelerated benefits cause of terminal illness, how will that affect the payable death benefit from the policy?

the death benefit will be smaller

a father owns a life ins. pol. on his 15 year old daughter. the policy contains the optional pay benefit rider. If the father becomes disables, what will happen to the life insurance premiums

the insureds premiums will be waived until she is 21