Exam chapter 2
Which of these actions is taken when a policyowner uses a life insurance policy as collateral for a bank loan? - revocable assignment - beneficiary change - irrevocable assignment - collateral assignment
collateral assignment
Which of these is NOT considered to be a right given to a policyowner? - surrendering the policys cash value - modify a provision in the insurance contract - assignment of ownership - change the beneficiary if revocable
modify a provision in the insurance contract
Which of these Nonforfeiture Options continue a build-up of cash value? - wavier of premium - extended term - reduced paid-up - cash surrender
reduced paid up
A return of premium life insurance policy is - a nonforfeiture option - whole life and increasing term - interest sensitive - variable life
whole life and increasing term
The consideration clause in a life insurance contract contains what pertinent information? - summary of benefits - offer and acceptance - entire contract - amount of premium payments and when they are due
Amount of premium payments and when they are due
How are surrender charges deducted in a life policy with a rear-end loaded provision? - deducted from the death benefit - deducted when the policy is discontinued - deducted from policy's cash valule - deducted when assigned to another policyowner
Deducted when the policy is discontinued
N is a student pilot with a large life insurance policy. Which of these features would limit the insurer's obligation in the event N was killed while flying as a student pilot? - misrepresentation - exclusion - collateral assignment - concealment
Exclusion
Which of the following nonforfeiture options offers the highest death benefit? - cash surrender - reduced paid up - extended term - dividend
Extended term
In a life insurance contract, an insurance company's promise to pay stated benefits is called the?
Insuring clause
All of these Settlement options involve the systematic liquidation of the death proceeds in the event of the insured's death EXCEPT - fixed period - interest only - fixed amount - life income
Interest only
What benefit does the Payor clause on a Juvenile Life policy provide?
Premiums are waved if payor becomes disabled
Typically a life insurance death benefit is paid by a lump sum payment. A option is a method of distributing a life insurance policy's death benefit OTHER than by a lump sum payment.
Settlement