Exam FX Life Policy Provision, Riders and Options

Lump sum

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

The beneficiary can only be changed with written permission of the beneficiary.

If a life insurance policy has irrevocable beneficiary designation,

Cash Surrender

Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policy owner?

6 months

What is the waiting period on a Waiver of Premium rider in life insurance policies?

Common Disaster

An insured and his wife are both involved in a head-on collision. The husband dies instantly, and the wife dies 15 days later. The company pays the death benefit to the estate of the insured. This indicates that the life insurance policy had what provision?

6 months

Most insurers impose a _____ month waiting period from the time of disability until the first premium is waived.

Entire Contract

The provision which states that both the policy and copy of the application form the contract between the policyowner and the insurer is called the

Reduction of Premium

An insured pays $1,200 annually for her life insurance premium. The insured applies this year's $300 worth of accumulated dividends to the next year's premium, thus reducing it to $900. What option does this describe?

$200,000

An insured purchase a 15 year level term life insurance policy with a face amount of $100,000. The policy contained an accidental death rider, offering a double indemnity benefit. The insured was severely injured in an auto accident, and after 10 weeks of hospitalization, died from the injuries. What amount would his beneficiary receive as a settlement?

Guaranteed Insurability

At the time the insured purchased her life insurance policy, she added a rider that will allow her to purchase additional insurance in the future without having to prove insurability. This rider is called.

That the cash value will not be lost

Nonforfeiture values guarantee which of the following for the policyowner?

The insured's age at death.

The insured had his wife named as the beneficiary of his life insurance policy. To ensure his wife has income for life after the insured's death, he chose the life income settlement option. The amount of payments will be determined by taking into account all of the following EXCEPT, A.) Projected interest rates. B.) Face amount of the policy. C.) The insured's age at death. D.) The beneficiary's life expectancy.

Lump sum

Upon the death of the insured, the contract is designed to pay the proceeds in cash, called

Reduction of Premium option

Allows the policyholder to apply policy dividends toward the next year's premium. The dividend is subtracted from the premium amount, yielding the new premium due to the year.

Guaranteed insurability rider

If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a

It determines who receives policy benefits if the primary beneficiary is deceased.

What would be an advantage to naming a contingent ) or secondary) beneficiary in a life insurance policy?

Payor Benefit Rider

Which of the following rider would NOT cause the Death Benefit to increase? A.) Guaranteed Insurability Rider. B.) Cost of Living Rider C.) Accidental Death Rider. D.) Payor Benefit Rider

They can be changed only with the written consent of that beneficiary

Which of the following statements is TRUE concerning irrevocable beneficiaries?