Chapter 5: Individual Life Insurance Contract: Provisions and Options

Trust

What type of account will most likely be established for a minor?

They are required by state law to be included in the policy.

Which of the following is TRUE about nonforfeiture values?

Coverage ends and the policy cannot be reinstated

What happens when a policy is surrendered for its cash value?

Lump Sum

What is the other term for the cash payment settlement option?

It is reduced to the amount of what the cash value would buy as a single premium

When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy?

Equal to the original policy for as long a period of time that the cash values will purchase

When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount?

Death on a plane crash for a fare-paying passenger

Which of the following is NOT typically excluded from life policies?

The insured's contingent beneficiary

when a life insurance was issued, the policyowner designated a primary and a contingent beneficiary. several years later, both the insured and the primary died in the same car accident, and it was impossible to determine who died first. which of the following would receive the death benefit?