Life Insurance Policy Provisions, Riders, and Options Chapter Quiz

all of the following are true regarding the guaranteed insurability rider Except?

It is available automatically, for no extra premium.

Which of the following statements is true of both the fixed-period and fixed-amount settlement options?

Both guarantee that the principal and interest will be fully paid out.

A 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.

Which of the following is true about the mandatory free-look period in a life insurance policy?

It starts when the policy is delivered.

Which of the following is Not a standard exclusion in life insurance policies?

Disability.

A spouse receives $5,000 a month until the principal and interest on her husband's life insurance policy have been paid out. Which settlement option did this beneficiary choose?

Fixed amount.

Which provision of a life insurance policy states that the application is part of the contract?

Entire contract.

Which of the following features allows an insurance policy to remain in force for a specific number of days beyond the premium due date?

Grace period provision.

All of the following are nonforfeiture options in life insurance policies Except?

Automatic premiums loans.

When a death claim is submitted, the insurer discovered that the insured understated her age on the application for a life policy. What action will the insurer take?

Pay a reduced death benefit based on the insured's actual age.

The insured usually pays $1,200 annually for her life insurance premium. This year, she has accumulated $175 in dividends, and applied that to her next premium, reducing it to $1,025. what dividend option has the insured chosen?

Reduction of premium.

If a life insurance policy has irrevocable beneficiary designation?

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

Because of an injury, an insured has been unable to work for 7 months. He wasn't able to pay his life insurance policy premium, yet the policy remained in force. The policy includes?

Waiver of premium rider.

Which of the following terms refers to the transfer of some or all of the ownership rights of a life insurance policy from one individual to another?

Assignment.

Under what circumstances will the contingent beneficiary receive the death benefit?

If the primary beneficiary dies before the insured.