4 - (Exam 2) Policy Provisions, Options and Riders

A life insurance policyowner was injured in an automobile accident which results in a total and permanent disability. Which rider would pay a monthly amount because of this disability?

Disability income rider

What is the name of the provision which states that a copy of the application must be attached to the policy when issued?

Entire Contract

Which of these would limit a company's liability to provide insurance coverage?

Exclusion

Which of these is NOT considered to be a nonforfeiture option in a whole life insurance policy?

Interest only

Which of the following is a reinstatement condition?

Proof of insurability

A policyowner may exercise which of these dividend options that uses the dividend to pay all or part of the next premium due?

Reduction of premium dividend option

All of these are common exclusions to a life insurance policy EXCEPT

accidental death

All of these are valid policy dividend options for a life insurance policyowner EXCEPT

accumulate without interest

Ownership of a life insurance policy may be temporarily transferred with a(n)

collateral assignment

Life insurance policies will normally pay for losses arising from

commercial aviation

A life insurance rider that allows an individual to purchase insurance as they grow older, regardless of insurability, is called a(n)

guaranteed insurability rider

A life insurance policyowner does NOT have the right to

revoke an absolute assignment

Dorian exercised a nonforfeiture option by using his life policy's cash value to purchase an extended term insurance option. When the term insurance expires,

the protection ends

Loans obtained by a policyowner against the cash value of a life insurance policy

would not be treated as taxable income

Which of these is NOT considered to be a common life insurance nonforfeiture option?

Life income annuity

Which of these is NOT a characteristic of the Accelerated Death Benefit option?

The benefit can be offered as a rider at a specific extra cost or may be at no cost

The suicide clause of a life insurance policy states that if an insured commits suicide within a stated period from the policy's inception, the insurer will only be liable for a return of premiums paid

minus indebtedness and without interest

A whole life policy option where extended term insurance is selected is called a(n)

nonforfeiture option

A provision in a whole life policy that allows a policyowner to terminate the policy in return for a reduced paid-up policy of the same type is called a(n)

nonforfeiture provision

The two major actions required for a policyholder to comply with the Reinstatement Clause are

provide evidence of insurability, pay past due premiums