Life Insurance CH.3 (Life Policy provisions, Riders, and Options)

The accelerated benefits provision will provide for an early payment of the death benefit when the insured

Becomes terminally ill

An absolute assignment is a

Transfer of all ownership rights in policy

The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called

Waiver of premium

If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select?

Fixed period

All of the following are dividend options except

Fixed period installments. Fixed period installments option is not one of the dividend options. (It is a settlement option)

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

It has the higher amount of insurance protection

If a policy has an automatic premium loan provision, what happens if the insured dies before the loan is paid back?

The balance of the loan will be taken out of the death benefit

A policyowner 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?

Automatic premium loan

What type of insurance would be use for a Return of Premium rider

Increasing term

Which provision of a life insurance policy that states the insurers duty to pay benefits upon the death of the insured and to whom the benefits will be paid?

Insuring clause

During partial withdrawal from a universal life policy, which portion will be taxed?

Interest

An insured has a continuous premium whole life policy. She would like to use the policy dividends to pay off her policy owner sooner than would have been possible otherwise. What dividend option could she use?

Paid Up option

Which option is being utilized when the insurer accumulates dividends at interest and then uses the accumulated dividends, plus interest, and the policy cash value to pay the policy up early?

Paid-Up option

What is term for how frequently a policy owner is required to pay the policy premium?

Mode