Provisions Options & Riders

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

Cash option

What limits the amount of money a policy owner may borrow for a whole life insurance policy?

Cash value plus the loan interest

When a life insurance policy is surrendering and the insured has selected the extended term non-forfeiture option, the cash value will be used to purchase term insurance that has a face value

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

Which settlement option was chosen when the policy owner specifies a dollar amount in which installments are to be paid?

Fixed amount

A man is involved in a car accident damaging his cervical vertebrae and the surrounding nerves. He becomes a quadriplegic as a result. Describe the insurance premiums that will be paid for the rest of his life if his policy contains a waiver of premium rider(how will he pay the premiums)

He would pay the regular premiums for the first 6 months then be reimbursed and have to pay nothing back afterwards

Mary the primary beneficiary of her husband's death policy, found that no settlement option was stated in the policy on the date of her husband's death. Who will select the settlement option to be used

Mary

A rider attached to a life insurance policy that provides coverage on a spouse or other family member is called the

Other insured rider

What benificary designation allows the benefits from a deceased beneficiary to be passed down to their heirs as opposed to having the benefits split amongst the surviving beneficiaries

Per stirpes

Wyonna will be allowed to reactivate her lapsed policy if action is taken within a certain period of time and proof of insurability is provided. What provision allows this

Reinstatement provision

An individual purchased a whole life insurance policy and named his wife as the owner. The policy has $12,000 in cash value after 20 years. Who has the right to the cash value?

The policy owner

What will happen if an insured continually uses the automatic premium loan option to pay that policy premium?

The policy will terminate once the cash value is reduced to nothing

In a cash surrender is the excess taxable as ordinary income if the cash value exceeds the premium paid?

Yes

Jasmine is suffering from a fatal disease that is expected to end her life in the near future. She applies to receive an accelerated death benefit from her insurer. What is the maximum amount her insurer can legally pay

100 percent

Tripton falls from a roof and injuries his spinal column leaving him disabled for a year. His insurance policy carries a Disability income benefit rider what benefits does that come with?

Monthly premium waiver and monthly income

An insured states her age as 40 on the application. When she dies the insurer discovers she was actually 42 at the time of application. What will the insurance company do?

Pay the death benefit in the amount that the premium at the correct age would have purchased