Chapter 2 - Life Provisions
S has a whole life policy with a premium payment due soon. Which provisions would keep the policy in force if S does not make the required payment and the policy has adequate cash value from which the premium payment can be made?
Automatic Policy Loan
What action will an insurer take if an interest payment on a policy loan is not made on time?
Automatically add the amount of interest due to the loan balance
Whose life is covered on a life insurance policy that contains a payor benefit clause?
Child
Which of the following statements about accumulated interest earned on dividends from an insurance policy is TRUE
It is taxed as ordinary income
Which of these are NOT an example of a Nonforfeiture option
Life income
The Accelerated Death Benefit provision in a life insurance policy is also known as a(n)
Living Benefit
In a life insurance policy, which provision states who may select policy options, designate and name a beneficiary, and be the recipient of any financial benefits from the policy?
Owner's Rights
Which of the following provisions guarantees that premiums will be waived if a Juvenile Life policyowner becomes disabled?
Payor clause
A provision in a life insurance policy that pays the policyowner an amount that does not surpass the guaranteed cash value is called the:
Policy Loan provision
Which of these life insurance riders allows the applicant to have excess coverage
Term rider
A return of premium life insurance policy is:
Whole life and increasing term
B owns a Whole Life policy with a guaranteed insurability option that allows him to purchase, without evidence of insurability, stated amounts of
additional Whole Life coverage at specified times
S would like to use dividends from her life insurance policy to purchase paid-up additions. All of these would be factors that determine how much coverage can be purchased EXCEPT
beneficiary's age
The consideration clause in a life insurance policy indicates that a policyowner consideration consists of a completed application and
the initial premium