Insurance pt. 3
Collateral assignment
A business owner was trying to obtain a bank loan to fund the purchase of a new business facility, but the bank required proof of additional assets to secure the loan. The business owner then decided to use her $250,000 life insurance policy to secure the loan. Which provision makes this possible?
The insured's premiums will be waived until she is 21
A father owns a life insurance policy on his 15-year-old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums?
Other insured rider
A rider attached to a life insurance policy that provides coverage in the insured's family members is called the
Cost of living rider
A rider that may be attached to a life insurance policy that will adjust the face amount based upon a specified index, such as the Consumer Price Index, is called
Refund the premium paid
An insured committed suicide one year after his life insurance policy was issued. The insurer will
6 months
For how long is an insurance company allowed to defer policy loan request?
February 28th, or 10 days after the time the policy is delivered
J applied for a life insurance policy on January 10. The policy was issued on January 31. J's agent was vacationing at the time the policy was issued, so J did not receive the policy until February 18. J decides that he does not want the policy. When would J need to return the policy to the insurer in order to receive a full refund of premium paid?
Insured's age at death
The insured had his wife named as the beneficiary of his insurance policy. To ensure that his wife had 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
Set premium rates
The ownership provision entities the policy owner to do all of the following EXCEPT
To purchase a smaller amount of the same type of insurance as the original policy
The paid-up addition option uses the dividend
Interest only option
The policy owner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policy owner choose?
It has the highest amount of insurance protection
What is the benefit of choosing extended term as a nonforfeiture option?
Grace period
What required provision protects against unintentional lapse of the policy?
Increasing term
What type of insurance would be used for a return of premium rider?
The beneficiary must have insurable intrest in the insured
Which is NOT true about beneficiary desginations?
Life income with period certain
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 payment will continue to a designated beneficiary?
Extended term
Which nonforfeiture option has the highest amount of insurance protection?
Payor benefit
Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled?
Both the principle and interest will be liquidated over a selected period of time
Which of the following best describes fixed-period settlement option?
The amount of premium payment
Which of the following information will be stated in the consideration clause of a life insurance policy?
They are required by state law to be included in the policy
Which of the following is TURE about nonforfeiture values?
Long-term care
Which of the following riders added to a life insurance policy can pay part of the death benefit to the insured to cover expense incurred in a nursing or convalescent home?
Life income
Which of the following settlements options in life insurance is known as straight life?