Chapter quiz life insurance policy provisions, options and riders
In order to reinstate a life insurance policy the insured doesn't have to
Pay next years premium in advance
A life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the
incontestability clause (2 years)
What is NOT a non forfeiture option in life insurance policies?
Automatic premium loans
What statement is true of both fixed period and fixed amount settlement options
Both guarantee that the principal and interest will be fully paid out
What is true about the mandatory free look period in a life insurance policy
It begins when the policy is delivered
What is not true regarding the guaranteed insurability rider
It is available automatically, for no extra premium
When a death claim is submitted, the insurer discovered that the insured understated her age on the application for a life policy. What will the insurer take?
Pay a reduced death benefit based on the insureds actual age
What is a characteristic of a revocable beneficiary designation
Policyowner can change beneficiary designation anytime without consent of beneficiary
The insured pays $1,200 annually for her life insurance premium. This year, she has accumulated $175 worth of dividends, which she applies to her next premium, thus reducing it to $1,025. What dividend option has the insured chosen?
Reduction of premium
How long is the waiting period on a waiver of premium rider in life insurance policies
6 months
What term refers to the transfer of some or all of the ownership rights of a life insurance policy from one individual to another
Assignment
What is not a standard exclusion in life insurance policies
Disability
A spouse receives $5,000 a month until the principle and interest on her husband"s life insurance policy have been paid out. Which settlement option did this beneficiary choose?
Fixed amount
What feature allows an insurance policy to remain in force for a specific number of days beyond the premium due date
Grace period provision
Under what circumstances will the contingent beneficiary receive the death benefit
If the primary beneficiary dies before the insured
