life policy provisions, riders and options

The validity of coverage under a life insurance policy may not be contested, except for nonpayment of premium, after the policy has been in force for at least how many years?

2

5 What applies to the 10-day free-look privilege?

A policyowner may return a policy for any reason during the free-look period and receive a full refund.

An insured receives an annual life insurance dividend check. What term best describes this arrangement?

Cash option

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 provision in an insurance policy extends coverage beyond the premium due date?

Grace Period

What type of insurance would be used for a Return of Premium rider?

Increasing Term

A couple owns a life insurance policy with a Children's Term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability?

Proof of insurability is not required

Life income joint and survivor settlement option guarantees

guarantees an income for two or more recipients for the duration of their lives.

A policyowner who is also the insured wants to name her husband as the beneficiary of her life policy. She also wishes to retain all of the rights of ownership. The policyowner should have her husband named as the

Revocable designation at any time and without the consent of the beneficiary.

What is TRUE concerning the Accidental Death Rider?

The Accidental Death Rider pays 2 or 3 times the face amount if death is the result of an accident as defined in the policy and occurs within 90 days of such an accident.

After a back injury, an insured is disabled for a year. His insurance policy carries a Disability Income Benefit rider. Which of the following benefits will he receive?

The Disability Income Benefit rider waives the policy premiums, it also allows the insured to receive a weekly or monthly income during the disability period.

If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a

The Guaranteed Insurability 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

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

What settlement options in life insurance is known as straight life?

The life-income option

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 rider waives the premium if the insured owner has been totally disabled for a predetermined period.

An insured pays an annual premium to his insurer. In return, the insurer promises to pay benefits in accordance with the terms of the contract. This is called

consideration

what is true of a children's rider added to an insured permanent life insurance policy

convertible to permanent insurance upon a child reaching the maximum age without evidence of insurability.

Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member?

family term rider

The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policyowner choose?

interest-only option

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

it will be subtracted from the death benefit.

The type of settlement option which pays throughout the lifetimes of two or more beneficiaries is called

joint and survivor

Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary?

lifetime income and period certain

if an insured continually uses the automatic premium loan option to pay the policy premium,

once the cash value is exhausted, the policy will terminate.

An insured has a life insurance policy from a participating company and receives quarterly dividends. He has instructed the company to apply the policy dividends to increase the death benefit. The dividend option that the insured has chosen is called

paid-up additions

An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident, and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do?

pay a reduced death benefit

What allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled?

payor benefit

What rider does not cause the Death Benefit to increase?

payor benefit rider

An insured died by suicide one year after the life insurance policy was issued. The insurer will

refund all premiums paid

Under an extended term nonforfeiture option, the policy cash value is converted to

same face amount as the former permanent policy.

Under which of the following circumstances would an insurer pay accelerated benefits?

severe illness. They may request immediate payment of some portion of the policy's death benefit, usually 50-100%, depending on the insurer

The interest earned on policy dividends is

taxable

What rider, when attached to a permanent life insurance policy, allows the policyowner to customize the policy to provide an additional amount of temporary insurance on the insured, or allows amounts of temporary insurance to cover other family members?

term rider

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

the insured estate

A father owns a life insurance policy on his 15-year-old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums?

the insurer will waive the premiums until the minor reaches a certain age, such as 21