Chapter 4 pt.2 - Life Provisions
Which of these would NOT be a valid reason to add the waiver of premium ride to a life insurance policy?
It allows a policy loan to cover premium payments if the policyowner becomes totally disabled
Which of these is NOT a true statement of the war exclusion?
It applies to civil insurrections
After the extended term life nonforfeiture option is chosen, the available insurance will be
Level term for a stated period of time
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
What happens to a life insurance policy when the policy loan balance exceeds the cash value?
Policy will no longer be in force
Which of the following is NOT dividend option for a life insurance policy?
Receiving the entire policy 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
When a lapsed policy's premium has been paid current, it has the potential of being...
Reinstated
What is payable to the policyowner if a whole life policy is surrendered prior to its maturity date?
The cash value
What is considered the collateral on a life insurance policy loan?
The policy's cash value
Which of these statements regarding the extended term insurance nonforfeiture option in a life policy is...
The premium to purchase the coverage comes from the policy's cash value
How is a collateral assignment used in a life insurance contract?
Transfers specific ownership rights to a creditor
A policyowner is permitted to take out a policy loan on a whole life policy at what point?
When the policy has a cash value
A life insurance policy's waiver of premium rider has the ability to...
relieve the insured of premium payments following an initial waiting period after the insured becomes totally disabled
How long can an insurer legally defer paying the cash value of a surrendered life insurance policy?
6 months
In the event of premium default, which life insurance provision will use the cash value to keep the policy in force?
Automatic premium loan
Scott has a life insurance policy in which the dividends are left with the insurance company. This particular policy may be paid up when the cash value plus accumulated dividends...
Equal the net single premium for the same face amount at the insured's attained age
Which benefit supplement added to a life insurance policy insures an entire family?
Family term rider
Which of the following is NOT subject to the promise to pay in an insuring clause?
How the premium is calculated
A life insurance policy provision that has the ability to reduce the death benefit is called the...
Accelerated (living) benefit
Which benefit is normally payable to a life insurance policyowner when the insured's life expectancy has been severely limited?
Accelerated (living) benefit
The absolute assignment of a life insurance policy results in...
All incidents of ownership transferred to the assignee
How may an insurance company classify an accidental death benefit on a life policy?
As an optional policy riderGuaranteed insurability t
A source of supplemental income for a life insurance policyowner can be derived from the...
Cash value
Which of the following is NOT a condition that must be met for an accidental death benefit to be paid?
Cause of death must be from a job-related injury
In what way is a life insurance policy affected by an accelerated benefit payment?
Decreases the death benefit
Which life insurance policy option allows the policyowner to have coverage equal to the net death benefit of the lapsed policy?
Extended term nonforfeiture option
What is the name of the rider that provides an additional purchase option in a life insurance policy?
Guaranteed insurability rider
A life insurance guaranteed insurability rider gives the insured the right, without proving insurability, to...
Periodically purchase additional insurance
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
Which life insurance clause prohibits an insurance company from questioning the validity of the contract after a state period of time has passed?
Incontestable clause
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