Life Insurance Policy Provisions, Riders, and Options

According tot he Entire contract provision, a policy must contain

A copy of the original application for insurance

What happens when a policy is surrendered for its cash value?

Coverage ends and the policy cannot be reinstated.

When a life insurance policy is cancelled and the insured has selected the extended term nonforfeiture option, the cash value will be used to purchase term insurance that has a face amount

Equal to the original policy for as long as period of time that the cash values will purchase

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?

Spendthrift provision

Which is NOT true about beneficiary designations

The beneficiary must have insurable interest in the insured. A beneficiary is the person or interest to whom the policy proceeds will be paid upon the death of the insured. Beneficiaries do not have interest in the policy holder.

What is true about a spouse term rider?

The rider is usually level term insurance

Which of the following is TRUE about nonforfeiture values?

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

All of the following are true regarding the guaranteed insurability rider EXCEPT

This rider is available to all insureds with no additional premium

The two types of asssignments are

absolute and collateral

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 insured's age at death

What kind of policy allows withdrawals or partial surrenders?

Universal Life

True regarding a single life settlement option?

It provides the income the beneficiary cannot outlive