Life Insurance chapter 3
D was actively serving in the marines when he was killed in an automobile accident while on leave.His $100000 whole life policy contains a war exclusion clause. How much will D'a beneficiary receive?
Full face amount
S has a whole life policy with a premium payment due soon. Which provision would keep the policy in force if S does not make the required payment and the policy has adequate cash value from which the premium payment can be made?
Automatic policy loan
Which of the following statements is CORRECT about accelerated death benefits?
Must have a terminal illness to qualify.
A policy loan is made possible by which of these life insurance policy features?
Cash value provision
Which rid provides coverage for a child under a parent's life insurance policy?
Child term rider
Which of these actions is taken when a policy owner uses a life insurance policy as collateral for a bank loan?
Collateral assignment
Which statement is true in regards to a policy loan?
Past-due interest on a policy loan is added to the total debt.
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 of the following provisions guarantees that premium will be waived if a juvenile life policyowner becomes disabled?
Payor clause
Which of the following provisions guarantees that premiums will be waived if a juvenile life policyowner becomes disabled
Payor clause
The ___ is authorized to assign a life insurance policy as collateral for a loan
Policyowner
Which of these nonforfeiture options continue a build up of cash value
Reduced paid- up
The provision that can be used to put an insurance policy back in force after it has lapses due to nonpayment
Reinstatement
B owns a whole life insurance policy with a guaranteed insurability option that allows him to purchase, without evidence of insurability, stated amount of
Whole Life insurance at specified times.
A potential client, age 40 , would like to purchase a whole life insurance policy that will accumulate cash value at a faster rate in the early years of the policy. Which statement is correct?
20-Pay Life accumulates cash value faster than Straight Life
S buys a 50,000 life insurance policy with an accidental death and dismemberment rider. S died 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. 5 years later T commits suicide. How much will the insurer pay?
50,000
P died five years after purchasing a life policy. While investigating the claim, the insurer discovered material misrepresentation made by P during the application process. WHich of these actions will the insurer take?
Beneficiary will be paid the death benefit
Which of these types of policies may not have the automatic premium loan provision attached to it?
Decreasing term
Additional coverage can be added to a whole like policy by adding:
Decreasing term rider
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
D owns a whole life policy that was purchased 10 years ago. If the premium payment suddenly stop and D takes no additional action, which nonforfeiture option will the insurer likely proceed with?
Extended term
A nonforfeiture clause gives the policy owner
Guaranteed values even if the policy has lapsed
All of these statements about the Waiver of premium provision are correct except
Insured must be eligible for Social Security disability for claim to be accepted
The agreement in a life insurance contract that states a specific sum of money will be paid to a designated person upon an insured's death is called
Insuring agreement
In a life insurance contract, an insurance company's promise to pay stated benefits is called
Insuring clause
Dividends paid from a life insurance policy are
Issued by the insurer
Which of these are NOT examples of a Nonforfeiture option?
Life income
The accelerated death benefit provision in a life insurance policy is also known as
Living benefit
Which of these is NOT considered to be a right given to a policyowner
Modify a provision in the insurance contract
WhAT IS THE SUICIDE PROVISION DESIGNED TO DO ?
safeguard the insurer from an applicant who is contemplating suicide
A long term care rider in a life insurance policy pays a daily benefit in the event of which of the following?
unable to independently perform two or more of the six activities of daily living
All of the following statements are true regarding a policies Grace period Except:
Past due premiums are waived
