Chapter four exam 2 policy provisions options riders xcel

Which provision allows the policy owner to change a term life policy to a permanent one without providing proof

Conversion

A life insurance policy owner falls behind on his premium payments and dies during the grace. How will the insurer handle this claim

Face amount will be paid minus the past due premium

Owner who permanently changes the ownership of a life insurance policy is exercising which contractual option

Absolute assignment

What does the insurance clause in a life insurance contract establish

An insurers basic promise

A waiver of premium benefit for a life insurance policy is utilized when the insured

Becomes completely disabled

A life insurance company has determined that a recently deceased insured had understated her age at the time of application five years prior how will this affect the insurers claim disbursment?

Beneficiary will receive reduced policy benefits

When a premium payment for a life insurance policy is missed what provision will dictate the actions taken by the insurer

Grace period provision

Which of these are not an example of nonforfeiture option

Life Income

Under what circumstances can an ensure contest a life insurance policy according to the incontestable clause

Material and delivery misrepresentations submitted an application

A router that is normally associated with a juvenile life policy is called a

Payor benefit

An error was made on Mary's life insurance application. Which of the following areas are errors commonly made on applications for which the incontestable clause does NOT apply

age

The free look provision gives the policy owner

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

How long is the grace period for ordinary insurance

30 days

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

All of the following writers can increase the death benefit amount except

Waiver of premium

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

A policy loan is made possible by which of these life insurance policy features

Policy loan provision

Which writer allows the policy owner to purchase life insurance coverage at specified dates without providing evidence of insurability

Guaranteed insurability option rider

The function of a discretionary provision is to protect the

Insurer

A life insurance policy owner was injured in an automobile accident which results in a total and permanent disability. Which writer because of his disability

Disability income rider

Which of these statements about a guaranteed insurability option rider is not true

Evidence of insurability is required when the option is exercised

Which writer allows a policy owner switch to a new policy in the future if they desire

Exchange privilege rider

All of these statements concerning settlement options are true except

Only the beneficiary may select

In a life insurance policy, Which provision states who may select policy options designate a name a beneficiary and be their recipient of any financial benefits from the policy

Owners rights

P is the insured on a participating life policy. Which statement is true if P's premiums are waived due to a disability?

P will still receive declared dividends

A young, married teacher has two children and owns a Whole Life policy. If the teacher wants an increasing Death Benefit to protect against inflation, the teacher should select which of the following Dividend Options?

Paid-Up Additional Insurance

Which statement is true in refused to a policy loan

Past due interest on a policy loan is added to the total debt

Which of these non-forfeiture continue a build up of cash value

Reduced paid-up

The dividend option which reduces the annual premium payment of a life insurance policy is called the

Reduction of premium dividend option

S buys a $10,000 Whole Life policy in 2003 and pays an annual premium of $100. S dies 5 years later in 2008 and the insurer pays the beneficiary $10,500. What kind of rider did S include on the policy?

Return of premium rider

How are dividends from a participating life insurance policy normally treated

Typically not subject to federal income taxes

Which of these types of life insurance allows the policy owner do you have level premiums also choose from a selection of investment options

Variable life

A life insurance policy which Ensures that the premium will be paid if the insured becomes disabled has what kind of rider attached

Waiver of Premium

When a permanent life insurance policy premiums or start what provision is designed to keep the policy from lapsing

Automatic premium loan

The automatic premium loan provision is designed to

Avoid a policy lapse

When is the base amount of a whole life policy paid

When the insured dies or at the policies maturity date which ever happens first

What does the ownership clause in a life insurance policy state

Who the policyowner is and what rights the policyowner is entitled to

Which of these actions is taken when a policyowner uses a life insurance policy as collateral for a bank loan

collateral assignment

K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary?

$20,000 death benefit

S buys a $50,000 whole life policy with a $50,000 Accidental Death and Dismemberment rider. S dies 1 year later of natural causes. How much will the insurer pay the beneficiary?

$50,000

A beneficiary can only be designated by the

Policyowner

Which of the following is a reinstatement condition

Proof of insurabiilty

D was actively serving in the Marines when he was killed in an automobile accident while on leave. His $100,000 Whole life policy contains a War Exclusion clause. How much will D's beneficiary's receive?

The full face amount

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

Accidental Death and Dismemberment rider (AD&D)

The Consideration clause in a life insurance contract contains what pertinent information?

Amount of premium payments and when they are due

Life insurance provision which allows owner to change the policies beneficiary designation is called the

Assignment provision

And I like insurance contract and insurance companies promise to pay stated benefits is called The

Insuring clause

N is covered by a Term Life policy and does not make the required premium payment which was due August 1. N dies September 15. What action will the insurer take?

Claim will be denied

And insured is past due on his life insurance premium that is still within the grace. What will the beneficiary receive if the insured dies during the grace period

Full face amount minus any past due premium

All of these Settlement options involve the systematic liquidation of the death proceeds in the event of the insured's death EXCEPT

Interest only

Which of the following statements about accumulated interest earned on dividends from an insurance policy is true

It is taxed as ordinary income