Chapter 4 (part 2) - Policy Provisions, Options and Riders

If an insured's age on a life insurance policy has been misstated, what is the insurer's liability if the insured dies? No death benefit is owed because of the misstatement of age The full original death benefit listed on the policy A prorated death benefit based on the amount of insurance the insured's premiums would have been if purchased at correct age The original death benefit listed on the policy minus any outstanding loans and interest

A prorated death benefit based on the amount of insurance the insured's premiums would have been if purchased at correct age

The double indemnity provision in a life insurance policy pertains to an insured's death caused by a(n) Sickness Suicide Accident War

Accident

All of these are common exclusions to a life insurance policy EXCEPT Accidental death Military service Aviation Hazardous occupations

Accidental death

Of the following dividend options, which of these is taxable? Reduction of premium One year term Paid-up additions Accumulation at interest

Accumulation at interest

An error was made on Mary's life insurance application. Which of the following areas do errors commonly occur on applications and for which the incontestable clause does NOT apply? Marital status Age Address Income

Age

Ownership of a life insurance policy may be temporarily transferred with a(n) Collateral assignment Absolute assignment Transferable assignment Beneficiary assignment

Collateral assignment

Life insurance policies will normally pay for losses arising from? Commercial aviation War Suicide Hazardous jobs

Commercial aviation

Matt is applying for life insurance and requests a double indemnity rider. A double indemnity benefit will be payable to Matt's beneficiary if Mat? Is killed while committing a felony Dies of a stroke Dies instantly from a car accident Is injured in a skiing accident and dies 18 months later

Dies instantly from a car accident

All of these are standard exclusions found in a life insurance policy EXCEPT Hazardous occupations Aviation Disability War

Disability

What is the name of the provision which states that a copy of the application must be attached to the policy when issued? Policy summary Buyer's guide Entire contract Entire policy

Entire contract

A life insurance policy normally contains a provision that restricts coverage in the event of death under all of the following situations EXCEPT Fare-paying passenger Pilot of personal airplane Suicide War

Fare-paying passenger

An insurer will accept a premium from the insured and continue the coverage in full force as though it was NOT late during which time period? Incontestable period Probation period Reinstatement period Grace period

Grace period

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

Guaranteed insurability rider

Which type of rider will waive the premium on a child's life insurance policy if the parent paying the premium dies? Waiver of premium Juvenile waiver Guaranteed insurability Payor benefit

Payor benefit

What is an insurance policy's grace period? Period of time after the initial premium is paid and before the policy is issued Period of time it takes for a policy's underwriting to complete Period of times after a policy is issued and before it is delivered to policyowner Period of time after the premium is due but the policy remains in force

Period of time after the premium is due but the policy remains in force

An endorsement found in an insurance plan which modifies the provisions of the policy is called a(n) Attachment Add-on Rider Supplement

Rider

An insured individual and the policy's beneficiary die from the same accident. The common disaster provision states the insurer will continue as if The insured outlived the beneficiary The beneficiary outlived the insured No beneficiary was ever named The insured and beneficiary died at the same time

The insured outlived the beneficiary

The free-look provision gives the policyowner? The right to return the policy for a partial refund within a specified number of days The right to contest the terms of the policy The right to change a policy provision The right to return the policy for a full refund within a specified number of days

The right to return the policy for a full refund within a specified number of days

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 us called a(n) insuring clause payor provision reinstatement provision nonforfeiture provision

nonforfeiture provision