Life Insurance Chapter 4

To protect the insurer from persons who purchase life insurance with the intention of committing suicide

What is the purpose of a suicide provision within a life insurance policy?

It will pay double or triple the face amount.

Which of the following statements is TRUE concerning the Accidental Death Rider?

Level or flexible

Which two terms are associated directly with the premium?

Copy of the original application

According to the entire contract provision, what document must be made part of the insurance policy?

The beneficiary can only be changed with written permission of the beneficiary.

If a life insurance policy has an irrevocable beneficiary designation,

The insured's estate.

The sole beneficiary of a life insurance policy dies before the insured. If the policyowner fails to change the beneficiary before the insured's death, the proceeds of the policy will go to

It transfers rights of ownership from the owner to another person

Which of the following statements is TRUE about a policy assignment?

Transfer of all ownership rights in a policy

An absolute assignment is a

Common Disaster

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?

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

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

Absolute and collateral.

The two types of assignments are

It determines who receives policy benefits if the primary beneficiary is deceased.

What would be an advantage to naming a contingent (or secondary) beneficiary in a life insurance policy?

Spendthrift provision

When a life insurance policy stipulates that the beneficiary will receive payments in specified installments or for a specified number of years, what provision prevents the beneficiary from changing or borrowing from the planned installments?

It permits the insured to return the policy for a full refund of premiums paid

Which of the following applies to the 10-day free-look privilege?

It begins when the policy is delivered.

Which of the following is TRUE about the 10-day free-look period in a Life Insurance policy?

A minor son of the insured

Which of the following named beneficiaries would NOT be able to receive the death benefit directly from the insurer in the event of the insureds' death?

$9,800

An insured had a $10,000 term life policy. The annual premium of $200 was due on February 1; however, the insured failed to pay the premium. He died on February 28. How much would the beneficiary receive from the policy?

Adjustment in the amount of death benefit.

An insured misstates her age at the time the life insurance application is taken. This misstatement may result in

$200,000

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 a double indemnity benefit. The insured was severely injured in an auto accident, and after 10 weeks of hospitalization, died from the injuries. What amount would his beneficiary receive as a settlement?

If the primary beneficiary predeceases the insured

An insured purchased a life insurance policy on his life naming his wife as primary beneficiary, and his daughter as contingent beneficiary. Under what circumstances could the daughter collect the death benefit?

Pay the death benefit

An insured purchased a life policy in 2010 and died in 2017. The insurance company discovers at that time that the insured had concealed information during the application process. What can they do?

Pay to the beneficiary an interest penalty from the date of the insured's death.

An insurer that does not pay a death benefit in a timely manner as required by state law, will be required to

Guaranteed insurability.

At the time the insured purchased her life insurance policy, she added a rider that will allow her to purchase additional insurance in the future without having to prove insurability. This rider is called

Term

Children's riders attached to whole life policies are usually issued as what type of insurance?

Interest

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

Grace period.

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

$100,000

The insured under a $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple indemnity rider in the policy specifies that the death must not be contributed to by the insured in any manner. In this case, what will the policy beneficiary receive?

Entire contract

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

Waiver of premium

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

the original age is used for premium determination

What is the advantage of reinstating a policy instead of applying for a new one?

Common Disaster Clause

What is the clause that describes the method of paying the death benefit in the event that the insured and beneficiary are both killed in the same accident?

Military service or war

What is the name of a clause that is included in a policy that limits or eliminates the death benefit if the insured dies as a result of war or while serving in the military?