Chapter: Policy Riders, Provisions, Options and Exclusions

Cost of living rider

Increases the death benefit to keep pace with inflation

Which provision of a life insurance policy states the insurer's duty to pay benefits upon the death of the insured, and to whom the benefits will be paid?

Insuring clause

Which of the following is true about the mandatory free look in a life insurance policy?

It commences when the policy is delivered

What is the benefit of choosing extended term as a nonforfeiture option?

It has the highest amount of insurance protection

If a settlement option is not chosen by the policyowner or the beneficiary, which option will be used?

Lump sum

Accidental death rider

if the insured dies from the accident, the death benefit is a multiple of the face amount

For how long is an insurance company allowed to defer policy loan requests?

6 months

Which of the following components must a life insurance policy have to allow policy loans?

Cash value

An insured and his wife are both involved in a head-on collision. The husband dies instantly, and the wife dies 15 days later. The company pays the death benefit to the estate of the insured. This indicates that the life insurance policy had what provision?

Common Disaster

Which of the following riders will not cause the death benefit to increase?

Payor Benefit Rider (only pays the premium if the payor is disabled or dies)

Which of the following statements about a suicide clause in a life insurance policy is TRUE?

Suicide is excluded for a specific period of years and covered thereafter

Which of the following will be stated in the consideration clause of a life insurance policy?

The amount of premium payment

Which is NOT true about beneficiary designations?

The beneficiary must have insurable interest in the insured.

Guaranteed Insurability Rider

The policyowner can increase the death benefit at specified ages or events. EX; Marriage or birth of a child