Life Insurance Practice Exam

Children's riders attached to whole life policies are usually issued as what type of insurance?

Term

For how long is an insurance company allowed to defer policy loan requests?

6 months

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.

The paid up addition option uses the dividend

To purchase a smaller amount of the same type of insurance as the original policy.

Which of the following is NOT typically excluded from life policies?

Death due to plane crash for a fare paying passenger

Which is true about the cash surrender nonforfeiture option?

Funds exceeding the premium paid are taxable as ordinary income

Which of the following is true of a children's rider added to an insured 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

Which two terms are associated directly with the premium?

Level or flexible

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?

Payoff Benefit

Which of the following information will be stated in the consideration clause of a life insurance policy?

The amount of premium payment

The type of settlement option which pays throughout the lifetimes of two or more beneficiaries is called

joint and survivor

A Policyowner who is also the insured wants to name her husband as the beneficiary of her life policy. She also wishes to retain all of the rights of ownership. The policy owner should have her husband named as the

Revocable beneficiary

The insured had his wife named as the beneficiary of his life 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

The insured's age at death

Which is true about a spouse term rider?

The rider is usually level term insurance

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?

Common Disaster