Life Policy Provisions, Riders and Options

An insured had a $10,000 term life policy. The annual premium of $200 was due on February 1; however, the insured failed to pay the premium. He died on February 28. How much would the beneficiary receive from the policy?

$9,800

The validity of coverage under a life insurance policy may not be contested, except for nonpayment of premium, after the policy has been in force for at least how many years.

2 years

What is the other term for the cash payment settlement option

Lump sum

Which of the following riders would NOT cause the Death Benefit to increase

Payor Benefit Rider

The policy owner pays for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this?

Reduction of premium

What is the advantage of reinstating a policy instead of applying for a new one?

The original age is used for premium determination

If a life policy allow the policy owner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a

Guaranteed insurability rider.

A father purchases a life insurance policy on his teenage daughter and adds the Payor Benefit rider. In which of the following scenarios will the rider waive the payment of premium?

If the father is disabled for more than 6 months

A rider attached to a life insurance policy that provides coverage on the insured's family member is called the

Other-Insured rider

A policy owner 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

Which of the following components must a life insurance policy have to allow policy loans?

Cash Value

j applied for a life insurance policy on January 10. the policy was issued 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 to the insurer in order to receive a full refund of premium paid?

February 28th, or 10 days after the time of the policy is delivered

At the time the insured purchased her life insurance policy, she added a rider that will allow her to purchase additional insurance in the future without having to prove insurability. This rider is called

Guaranteed insurability

Which of the following statements is TRUE about a policy assignment

It transfers rights of ownership from the owner to another person

A father owns life insurance on his 15--year old daughter. The policy contains the optional payout benefit rider. If the father becomes disabled what will happen to the life insurance premiums?

The insured's premiums will be waived until she is 21.