Individual Life Insurance Contract - Provisions and Options

The policy will terminate when the loan amount with interest equals or exceeds the cash value

An insured stops making payments on a loan taken from his cash value policy. What will most likely happen?

Automatic premium loan

A policy owner fails to pay the premium due on his whole life policy after the grace period passes, but the policy remains in force. This is due to what provision?

The policy will terminate when the cash value is reduced to nothing

If an insured continually uses the automatic premium loan option to pay the policy premium,

Grace period

The automatic premium loan provision is activated at the end of the

Taxable

The interest earned on policy dividends i

To purchase a smaller amount of the same type of insurance as the original policy

The paid-up addition option uses the dividend

It has the highest amount of insurance protection

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

They are required by state law to be included in the policy

Which of the following is TRUE about nonforfeiture values?

Pay a reduced death benefit

An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do?

Consideration

An insured pays an annual premium to his insurer. In return, the insurer promises to pay benefits in accordance with the terms of the contract. This is called

Policyowner

If the policy owner, the insured, and the beneficiary under a life insurance policy are three different people, who has the ownership rights?

The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive

An insured has chose joint and 2/3 survivor as the settlement options. What does this mean to the beneficiaries?