LIfe Insurance Chapter 3
The provision which states that both the policy and a copy of the application form the contract between the policyowner and the insurer is called the
entire contract
after a back injury, an insured is disabled for a year his insurance policy carried a disibilty benefit rider. WHich of the following benefits will he recieve.
monthly premium waiver and monthly income
who can request changes in premium payments, face value, loans and policy plans.
policy owner
an insured purchased a 15-year level term life insurance policy with a face amount of 100,000. the policy contained an accidental death rider, offering double indemnity benefits. THe insured was severley injured in an auto accident, and after 10 weeks of hospitalilzation, died from the injuries. What amount would his beneficiary recieve as a settlement
200,000
Which of the following applies to the 10-day free-look privilege?
It permits the insured to return the policy for a full refund of premiums paid.
Which of the following policy components contains the company's promise to pay?
insuring clause
If a settlement option is not chosen by the policy owner or the beneficiary, what option will be used?
lump sum
All of the following are dividend options EXCEPT
Paid up additions, FIXED PERIOD INSTALLMENTS, accumulated at interest, redution of premium
an insured pays $1200 annually for her life insurance premium. The insured applies this years $300 worth of accumulated dividends to the next years premium, thus reducing it to $900. What option does this describe
reduction of premium
under which of the following circumstances would an insurer pay accelerated benefits
an insured is disagnosed with cancer and needs help paying for her medical treatment
According to the entire contract provision, what document must be made part of the insurance policy?
copy of the original appliction
which is TRUE about the cash surrender nonforfeiture option?
funds exceeding the premium paid are taxable as ordinary income
what is the waiting period on a Waiver of Premium rider in life insurance policies
6 months
what is the waiting period on a waiver of premium rider in life insurance policies
6 months
A rider that may be attached to a life insurance policy that will adjust the face amount based upon a specific index, such as the Consumer Price Index, is called
Cost of living rider.
what type of insurance would be used for a return of premium rider
increasing term
which of the following statements about the reinstatement provision is true
it requires the policyowner to pay all overdue premiums with interest before the policy is reinsated
which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled
payor benefit
which of the following riders is often used in business life insurance policies when the policy owner needs to change the insured under the policy
substitute insured rider
the life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the
incontestability clause
the interest earned on policy dividends is
taxable
if a life insurance policy has an irrevocable beneficiary designation
the beneficiary can only be changed with written permission of the beneficiary
The insured had his wife named as the beneficiary of his life insurance policy. To ensure that his wife had income for life after the insured's death, he chose the life income settlement option. The amount of payments will be determined by taking into account all of the following EXCEPT
the insureds age at death
what is the purpose of a fixed-period settlement option
to provide a guarnteed income for a certain amount of time
The waiver of cost insurance is found in what type of insurance
universal life
What kind of policy allows withdrawals or partial surrenders?
universal life
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
When may an insurance company use suicide as a defense against paying a death claim?
when death occurs within a specifies period of time after the policy was issued
Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled?
payor benefit
According to the Entire Contract provision, a policy must contain
A copy of the original application for insurance.
which of the following riders is often used in business life insurance policies when the policyowner needs to change the insured under the policy?
substiture insured rider
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
an insured has continuous premium whole life policy. She would like to use the policy dividends to pay off her policy sooner than would have been possible otherwise. What dividend option could she use?
paid-upon option
Entire contract=
policy + copy of application + any riders or amendments