Life and Health Exam Chapter 4

Generally, an insurer may defer the granting of a policy loan for up to ______ months. The quiz is currently paused. 12 9 6 3

6

What are the two types of life insurance assignments? The quiz is currently paused. Entire amount and percentage amount Complete and partial Absolute and collateral Revocable and irrevocable

Absolute and collateral

Which provision allows an insurer to borrow from the cash value of a policy in order to pay premiums due and prevent a lapse in coverage? The quiz is currently paused. Automatic Premium Loan Partial Withdrawal Reinstatement Spendthrift

Automatic Premium Loan

If overdue premiums are not paid by the end of the grace period, a traditional whole life policy will automatically: The quiz is currently paused. Be reduced in face amount by the amount of the overdue premium Be cash surrendered Become extended term Be canceled with no value

Become extended term

When a policy lapses due to nonpayment of premium, which nonforfeiture option is the automatic option? The quiz is currently paused. Cash surrender value Extended term Reduced paid-up Automatic premium loan

Extended term

Which of the following is FALSE about the Automatic Premium Loan Provision (APL)? The quiz is currently paused. The APL is treated like any other policy loan For it to be included in the policy, there is an additional premium charge It is designed to prevent unintentional policy lapse It is only available on cash value policies

For it to be included in the policy, there is an additional premium charge

The ______________ clause is the insurance company's promise to pay the policy's death benefit to the named beneficiary, after receiving due proof of death of the insured, as long as the policy is in force. The quiz is currently paused. Incontestability Insuring Entire Contract Consideration

Insuring

Which one of the following regarding collateral assignments is false? The quiz is currently paused. The insurer is not responsible for determining the validity of the assignment It is typically used when an insurance policy is used as collateral for a loan It causes a permanent change in ownership It takes precedence over any beneficiary designation

It causes a permanent change in ownership

What happens if a policyowner exercises the free look? The quiz is currently paused. All premiums and any policy fee paid for the policy must be refunded to the owner within 30 days from the date that the insurer is notified of the cancellation The policy is cancelled from that period forward and he/she does not owe any amount for breach of contract He/she will receive a refund of any premiums paid in excess of the cost of underwriting He/she will receive the cash values in the policy, if any

All premiums and any policy fee paid for the policy must be refunded to the owner within 30 days from the date that the insurer is notified of the cancellation

Jamie has a $200,000 permanent policy and cannot continue making the premium payments. She still, however, wants the peace of mind of being covered for the same $200,000 in death benefit although it may be for an abbreviated period of time. The Nonforfeiture Option Jamie should choose is: The quiz is currently paused. One-Year Term Reduced Paid-Up Extended Term Paid-Up Additions

Extended Term

Beth exercised an owner's option on a life policy to stop paying premiums but continue to be covered until she was age 100. Which Nonforfeiture Option did she choose? The quiz is currently paused. Extended Term Reduced Paid-Up Paid-Up Additions Paid-Up Option

Reduced Paid-Up

Lyle owns a $50,000 20-Pay Life Policy that he lets lapse at the end of the fourth year. The Nonforfeiture Option providing the longest period of coverage would be: The quiz is currently paused. Reduced Paid-Up Extended Term Paid-Up Option Paid-Up Additions

Reduced Paid-Up

The provision which denies the beneficiary the right to commute, alienate, or assign his/her interest in the policy proceeds is: The quiz is currently paused. The Common Disaster Clause The Spendthrift Clause The Insuring Clause The Consideration Clause

The Spendthrift Clause