Chapter 4: Life Provisions

Which life insurance policy provisions allows a policy owner to cancel the policy and receive a full refund within a limited time period after policy delivery?

Free-look period

A life insurance policy that contains an accelerated living benefit rider will provide funds if the

Insured is expected to be confined to a nursing home for life.

Which of these is NOT a common life insurance nonforfeiture option?

Life income annuity

Joe is a life insurance policyowner who has failed to pay interest on his policy loan. What will result from this nonpayment?

Loan amount is increased to reflect the amount of interest due

Tim is confined to a nursing home but doesn't have a terminal illness. Which life insurance rider is designed to help pay for this type of expense?

Long-term care benefit rider

If an insured dies during the grace period without having paid the premium, how much will the insurer pay?

Policy's face amount minus any premiums due

How is the insured protected if a payor benefit rider is attached to the life insurance policy?

Premium payments are waived in the event the premium payor dies or becomes disabled

Which statement regarding the life insurance premium for a children's rider is true?

Premium remains the same no matter how many children

What effect can a long-term benefit rider have on a life insurance policy?

Reduce death benefit

Which of the following is true regarding a person receiving a waiver of premium benefit?

The insured must be disabled for a period of time

A life insurance policy that includes a return of premium rider will pay the beneficiary how much upon the insured's death?

Total premiums paid plus the policy face amount

A policy owner is permitted to take out a policy loan on a whole life policy at what point?

When the policy has a cash value

What happens to the death benefit of a life insurance policy if the insured elects a partial payment from the accelerated (living) benefit provision?

reduced

How long can an insurer legally defer paying the cash value of a surrendered life insurance policy?

6 months

A life insurance policy provision that has the ability to reduce the death benefit is called the?

Accelerated (living) benefit

How may an insurance company classify an accidental death benefit on a life policy?

As an optional policy rider

In the event of premium default, which life insurance provision will use the cash value to keep the policy in force?

Automatic premium loan

Which life insurance policy option allows the policy owner to have coverage equal to the net death benefit of the lapsed policy?

Extended term nonforfeiture option

An insured has a $25,000 whole life insurance policy with $6,000 cash value available. Under the extended term nonforfeiture option, what is the amount of insurance available to the insured?

$25,000

What is payable to the policy owner if a whole life policy is surrendered prior to its maturity date?

The cash value