life insurance 2

S buys a $50,000 whole life policy with a $50,000 Accidental Death and Dismemberment rider. S dies 1 year later of natural causes. How much will the insurer pay the beneficiary?

$50,000

T took out a $50,000 life insurance policy with an Accidental Death and Dismemberment rider. Five years later, T commits suicide. How much will the insurer pay?

$50,000

The option that provides an additional death benefit for a limited amount of time at the lowest possible cost is called a(n)

(AD&D) accidental death

K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary?

20k death benefit

An insurer may normally delay the payment of a cash value loan or surrender value for up to

6 months

Variable Whole Life Insurance can be described as

both an insurance and securities product

Which rider provides coverage for a child under a parent's life insurance policy?

child term rider

The incontestable clause allows an insurer to

contest a claim during the contestable period

How are surrender charges deducted in a life policy with a rear-end loaded provision?

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?

exclusion

in a life insurance policy which feature states that the policy will not cover certain risks

exclusion

A Nonforfeiture clause gives the policyowner

guaranteed values even if the policy has lapsed

In a life insurance contract an insurance company's promise to pay stated benefits is called the

insuring clause

B receives yearly dividends and interest from a participating life insurance policy. Which of these should B include as gross income for federal income tax purposes?

interest only

The Accelerated Death Benefit provision in a life insurance policy is also known as a(n)

living benefit

An insured's inability to perform two or more activities of daily living may trigger which type of policy rider?

long term care

Which of the following statements is CORRECT about accelerated death benefits

must have a terminal illness to qualify

all of these statement concerning settlement option are true except

only the beneficiary may select

K owns a Whole Life policy. If K wants an increasing Death Benefit to protect against inflation, which Dividend Option should she chose?

paid up additional insurance

All of the following statements are true regarding a policy's grace period except

past due premiums are waived

M had an annual life insurance premium payment due January 1. She died January 10 without making the premium payment. What action will the insurer take?

pay face amount minus the past due premium

Which life insurance rider typically appears on a Juvenile life insurance policy?

payor benefit rider

The___has the right to change a life insurance policy's beneficiary

policy owner

the is authorized to assign a life insurance policy as collateral for a loan

policy owner

M has an insurance policy that also has an outstanding policy loan at the time of M's death. The insurer will deduct the outstanding loan balance from the

policy proceeds

What benefit does the Payor clause on a Juvenile Life policy provide?

premiums are waived if the payor becomes disabled

The provision that can be used to put an insurance policy back in force after it has lapsed due to nonpayment is called

reinstatement

which of these provisions require proof of insurability after a policy has lapsed

reinstatement

Which type of life policy contains a monthly mortality charge as well as self-directed investment choices?

variable universal life

P is blinded in an industrial accident. Which provision of his life insurance policy will pay a stated benefit amount?

AD&D

which of these statement about a guaranteed insurability option rider is not true

Evidence of insurability is required when the option is exercised

a long term care rider in a life insurance policy pays a daily benefit in the event of which of the following

Inability pf the insured to perform more than 2 (ADL's)

K's whole life insurance policy lapsed two months ago due to nonpayment. She would now like to reinstate the policy. All of these statements are correct about the policy's reinstatement EXCEPT

K will forfeit the right to use the automatic loan provision upon reinstatement

P is the insured on a participating life policy. Which statement is true if P's premiums are waived due to a disability?

P will still receive declared dividends

which of the following statements about accumulated interest earned on dividends from an insurance policy is true

Taxed as ordinary income

A policyowner may generate taxable income from which of the following Dividend Options?

accumulation at intterest

A cost of living rider gives the insured

additional death benefits

A Term Life rider offers the insured

additional life coverage

B owns a Whole Life policy with a guaranteed insurability option that allows him to purchase, without evidence of insurability, stated amounts of

additional whole life coverage at specified times

When does a Guaranteed Insurability Rider allow the insured to buy additional coverage?

at future date with no evidence of insurability required

What action will an insurer take if an interest payment on a policy loan is not made on time?

automatically add the amount of interest due to the loan balance

S would like to use dividends from her life insurance policy to purchase paid-up additions. All of these would be factors that determine how much coverage can be purchased EXCEPT

beneficiary's age