ExamFX Chapter 1
which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium?
automatic premium loan
which of the following is not typically excluded from life policies
death due to plane crash for a fare-paying passenger
a rider attached to a life insurance policy that provides coverage on the insured's family member is called the
other-insured rider
which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which if the original recipient dies, the payments will continue to a designated beneficiary
life income with certain period
which of the following explains the policyowner's right to change beneficiaries, choose options and receive proceeds of a policy
owner's rights
an insured pays an annual premium to his insurer. In return, the insurer promises to pay benefits in accordance with the terms of the contract. This is called
consideration
upon the death of the insured, the primary beneficiary discovers that the insured chose the interest only settlement option, what does this mean
the beneficiary will only receive payments of the interest earned on the death benefit
all of the following are true statements regarding the accumulation at interest option except
the interest credited under this option is not taxable since it remains inside the insurance policy
if a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select
fixed period
which of the following riders would not cause the death benefit to increase
payor benefit rider
all of the following are true regarding the guaranteed insurability rider except
this rider is available to all insureds with no additional premiums
children's riders attached to whole life policies are usually issued as what type of insurance
term
which of the following would be deducted from the death benefit paid to a beneficiary, if a partial accelerated death benefit had been paid while the insured was still alive
amount paid with the accelerated benefit, plus the earnings lost by the insurance company in interest income from the accelerated benefit
what is the advantage of reinstating a policy instead of applying for a new one
the original age is used for premium determination
under an extended term nonforfeiture option, the policy cash value is converted to
the same face amount ass in the whole life
which of the following premium payment modes will incur the lowest overall payment
annual
what is the other term for the cash payment settlement option
lump sum
an absolute assignment is a
transfer of all ownership rights in a policy
the provision which states that both the policy and a copy of the application form the contract between the policyowner and the insurer is called the
entire contract
when a life insurance policy is cancelled and the insured has selected the extended term nonforfeiture option, cash value will be used to purchase term insurance that has a face amount
equal to the original policy for as long a period of time that the cash values will purchase
which of the following is true of a children's rider added to an insured's permanent life insurance policy
it is term coverage that is convertible to permanent insurance at or prior to the child reaching the maximum coverage age
when a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to
purchase a single premium policy for a reduced face amount
which of the following factors determines the amount of each installment paid in a life income option arrangement
recipient's life expectancy and amount of principal
