Quiz questions policy rider

Which of the following best describes fixed-period settlement option?

Both the principal and interest will be liquidated over a selected period of time.

Which of the following information will be stated in the consideration clause of a life insurance policy

The amount of premium payment

Upon the death of the insured, the primary beneficiary discovers that the insured chose the interest only settlement option. What does this mean?

The beneficiary will only receive payments of the interest earned on the death benefit.

If an insured withdraws a portion of the face amount in the form of accelerated benefits because of a terminal illness, how will that affect the payable death benefit from the policy?

The death benefit will be smaller

According to the entire contract provision a policy most contain what?

A copy of the original application for insurance

The accelerated benefits provision will provide for an early payment of the death benefit when the insured

Becomes terminally ill

Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policyowner?

Cash surrender

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

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

Entire Contract

When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount?

Equal to the original policy for as long as the cash values will purchase.

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

Guaranteed insurability

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

Guranteed insurability rider

An insured purchased a Life Insurance policy naming his wife as primary beneficiary and his daughter as contingent beneficiary. Under what circumstances could the daughter collect death benefit

If the primary beneficiary predeceased the insured

Which of the following statements is true about policy assignment

It transfers rights of ownership from the owner to another person.

Regarding the free-look provision, the insurance company

Must allow the policyowner to return the policy for a full refund.

The dividends option in which the policy owner uses dividends to purchase a term policy for one year is referred to as the?

One-year term option

A rider attached to a life insurance policy that provides coverage on the insured's family members is called the

Other-insured rider

An insured has a continuous premium whole life policy. She would like to use the policy dividends to pay off her policy sooner than would have been possible otherwise. What dividend option could she use?

Paid-up option

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

When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to

Purchase a single premium policy for a reduced face amount

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

The original age is used for premium determination

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

The same face amount as in the whole life policy

An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?

The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive.

Which of the following is TRUE about non forfeiture values?

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

What required provision protects against unintentional policy lapse?

grace period

If a settlement option is not chosen by the policy owner or the beneficiary, what option will be used?

lump sum

Which of the following riders would NOT cause the death benefit to increase

payor benefit rider