Chapter 2 Exam - Life Provisions

Which of these is not considered to be a right given to a policyowner?

Modify a provision in the insurance contract

Which of the following statements is correct about accelerated death benefits?

Must have a terminal illness to qualify

Which rider provides coverage for a child under a parent's life insurance policy?

Child term rider

How do life insurance companies handle cases where the insured commits suicide within the contract stated contestable period?

Claims are denied under the suicide clause of the policy

Which of the following provisions guarantees that premiums will be waived if a juvenile life policy owner becomes disabled?

Payor clause

The provisions that can be used to put an insurance policy back in force after it has lapsed due to nonpayment is called

Re-installment

J let her life insurance policy lapse 8 months ago due to nonpayment. She can reestablish coverage under which of the following provisions?

Reinstatement provision

Which of these life insurance riders allow the applicant to have excess coverage?

Term rider

P purchases a $50,000 Whole life insurance policy in 2005. One of the questions on the application asks if P engages in scuba diving, to which P answers no. The policy is an issued with no scuba exclusions. In 2010, P takes up scuba diving and dies in a scuba related accident in 2011. What will the insurance pay to pes beneficiary?

$50,000 minus any outstanding policy loans

A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster rate in the early years of the policy. Which of these statements made by the producer would be correct?

20-Pay Life accumulates cash value faster than Straight Life

The option that provides an additional death benefit for a limited amount of time at the lowest possible cost is called a(n)

Accidental Death and Dismemberment rider (AD&D)

P died five years after purchasing a life policy. While investigating the claim, the insurer discovered material misrepresentations made by P during the application process. Which of these actions will the insurer take?

Beneficiary will be paid the Death Benefit

Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it?

Decreasing term

How are surrender charges deducted in a life policy with a rear-end loaded provision?

Deducted when the policy is discontinued

The agreement in a life insurance contract that states a specific sum of money will be paid to a designated person upon an insured's death is called a(n)

Insuring agreement

In a life insurance contract, and insurance companies promise to pay stated benefits is called the

Insuring clause

The accidental death and dismemberment (AD & D) Provision in a life insurance policy would pay additional benefit if the insured

Is blinded by an accident

D is the policyowner and insured for a $50,000 life insurance policy. The beneficiary is D's wife. D and his wife divorce and D remarries, transferring ownership of his policy to his new wife. If D dies without making any further changes, to whom will the policy proceeds be paid to?

ex-wife because she is still the beneficiary of this policy, even though policy ownership has changed to his current spouse

When an insurer issues a policy that refuses to cover certain risks, this is referred to as a(n)

exclusion

What is suicide provision designed to do?

safeguard the insurer from an applicant who is contemplating suicide