chapter 4 Life provisions exam
A policyowner has a life insurance policy where she had listed her age on the application as 5 years younger than her actual age. If she dies and the insurer discovers the misstatement of age, how much will the insurance company pay?
Less than the face amount
Tim is confined to a nursing home but doesn't have a terminal illness. Which life insurance rider is designed to help pay for this type of expense?
Long-term care benefit rider
What happens to a life insurance policy when the policy loan balance exceeds the cash value?
Policy will no longer be in force
How is the insured protected if a payor benefit rider is attached to the life insurance policy?
Premium payments are waived in the event the premium payor dies or becomes disabled
Which statement regarding the life insurance premium for a children's rider is true?
Premium remains the same no matter how many children
What effect can a long-term care benefit rider have on a life insurance policy?
Reduced death benefit
After the extended term life nonforfeiture option is chosen, the available insurance will be
level term for a stated period of time
A life insurance guaranteed insurability rider gives the insured the right, without proving insurability to
periodically purchase additional insurance
When a lapsed policy's premium has been paid current, it has the potential of being
reinstated
How long can an insurer legally defer paying the cash value of a surrendered life insurance policy?
6 months.
Which benefit is normally payable to a life insurance policyowner when the insured's life expectancy has been severely limited?
Accelerated (living) benefit
How may an insurance company classify an accidental death benefit on a life policy?
As an optional policy rider
Which of these is NOT a true statement of the war exclusion?
Civil insurrections apply
Which of the following is NOT guaranteed in a whole life policy?
Dividend Scale
A life insurance policy provision that has the ability to reduce the death benefit is called the
accelerated (living) benefit
The absolute assignment of a life insurance policy results in
all incidents of ownership transferred to the assignee
The automatic premium loan provision can be accurately described
as a provision that provides a policy loan to pay any premiums by the end of the grace period
Which statement regarding the waiver of premium rider is accurate?
Cash payment is not directly provided to the policyowner
A source of supplemental income for a life insurance policyowner can be derived from the
Cash value
What is payable to the policyowner if a whole life policy is surrendered prior to its maturity date?
The cash value
Which of the following is true regarding a person receiving a waiver of premium benefit?
The insured must be disabled for a period of time
Which of these statements regarding the extended term insurance nonforfeiture option in a life policy is accurate?
The premium to purchase the coverage comes from the policy's cash value
Scott has a life insurance policy in which the dividends are left with the insurance company. This particular policy may be paid up when the cash value plus accumulated dividends
equal the net single premium for the same face amount at the insured's attained age.
A life insurance policy that contains an accelerated (living) benefit rider will provide funds if the
insured is expected to be confined to a nursing home for life
How is a collateral assignment used in a life insurance contract?
Transfers specific ownership rights to a creditor
Which of these would NOT be a valid reason to add the waiver of premium rider to a life insurance policy?
It allows a policy loan to cover premium payments if the policy owner becomes totally disabled.
A life insurance policyowner would like a dividend option that results in a limited current outlay of funds. Which dividend option would be chosen?
Reduction of premium payment
A life insurance policy that includes a return of premium rider will pay the beneficiary how much upon the insured's death?
Total premiums paid plus the policy face amount
Which life insurance policy would be eligible to include an automatic premium loan provision?
Whole life