Life Policy Riders
A long stretch of national economic hardship causes a 7% rate of inflation. A policyowner notices that the face value of her life insurance policy has been raised 7% as a result. Which policy rider caused this change? A Value Adjustment Rider B Return of Premium Rider C Inflation Rider D Cost of Living Rider
Cost of Living Rider
A rider that may be attached to a life insurance policy that will adjust the face amount based upon a specific index, such as the Consumer Price Index, is called A Payor rider. B Cost of living rider. C Accelerated benefit rider. D Living need rider.
Cost of living rider.
All of the following are features and requirements of the Living Needs Rider EXCEPT A The remainder of the policy proceeds is payable to the beneficiary at the insured's death. B It provides funds for medical and nursing home expenses to a terminally ill insured. C Diagnosis must indicate that death is expected within 3 years. D It is usually available at no additional charge.
Diagnosis must indicate that death is expected within 3 years.
Which of the following statements best describes the effect the Accelerated Benefit provision would have on the benefits paid to the beneficiary? A It will decrease the benefits paid to the beneficiary. B It will not affect the benefits paid to the beneficiary. C It will reduce the benefits by 70%. D It will increase the benefits paid to the beneficiary.
It will decrease the benefits paid to the beneficiary.
The Waiver of Cost of Insurance rider is found in what type of insurance? A Whole Life B Joint and Survivor C Juvenile Life D Universal Life
Universal Life
The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called A Waiver of premium. B Guaranteed insurability. C Waiver of cost of insurance. D Payor benefit.
Waiver of premium.
All of the following are the responsibilities of every long-term care insurer in California EXCEPT A Provide enough business to solicit long-term care insurance. B Establish marketing procedures to assure that any comparison of policies will be fair and accurate. C Establish marketing procedures to assure excessive insurance is not sold or issued. D Submit to the Commissioner a list of all agents authorized to solicit individual consumers for the sale of long-term care insurance.
Provide enough business to solicit long-term care insurance.
If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a A Guaranteed insurability rider. B Paid-up additions option. C Cost of living provision. D Nonforfeiture option.
Guaranteed insurability rider.
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 A Accelerated benefits. B Cost of living. C Guaranteed insurability. D Waiver of cost of insurance.
Guaranteed insurability.
The insured under a $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple indemnity rider in the policy specifies that the death must not be contributed to by the insured in any manner. In this case, what will the policy beneficiary receive? A $0 B $50,000 (50% of the policy value) C $100,000 D $300,000 (triple the amount of policy value)
$100,000
A provision in a life insurance policy that provides for the early payment of some portion of the policy face amount should the insured suffer from a terminal illness or injury is called A Waiver of maturity provision. B Accelerated Benefit provision. C Viatical Settlement provision. D Automatic premium loan provision.
Accelerated Benefit provision.
Which of the following annuity riders ensures investors will receive a set amount of income annually? A Guaranteed Minimum Income Benefit B Guaranteed Minimum Accumulation Benefit C Guaranteed Lifetime Earnings D Guaranteed Lifetime Withdrawal
Guaranteed Minimum Income Benefit
Which of the following statements is TRUE concerning the Accidental Death Rider? A It is also known as a triple indemnity rider. B This rider is only available to insureds over the age of 65. C It is only available in group insurance. D It will pay double or triple the face amount.
It will pay double or triple the face amount.
Every long-term care insurer in California must submit to the Commissioner a list of all agents or other insurer representatives authorized to solicit individual consumers for the sale of long-term care insurance. These submitted agent lists must be updated at least A Semiannually B Monthly C Quarterly D Annually
Semiannually
All of the following are true regarding the guaranteed insurability rider EXCEPT A The insured may purchase additional insurance up to the amount specified in the base policy. B It allows the insured to purchase additional amounts of insurance without proving insurability only at specified dates or events. C This rider is available to all insureds with no additional premium. D The insured may purchase additional coverage at the attained age.
This rider is available to all insureds with no additional premium.
What is the purpose of annuity riders? A To allow an annuity to build cash value B To increase the cost of an annuity C To allow investors to obtain additional benefit D To provide more annuity products to consumers
To allow investors to obtain additional benefit
After a back injury, an insured is disabled for a year. His insurance policy carries a Disability Income Benefit rider. Which of the following benefits will he receive? A Percentage of medical costs paid by the insurer B Payments for life C Yearly premium waiver and income D Monthly premium waiver and monthly income
Monthly premium waiver and monthly income
All of the following topics may be included in the continuing education requirement for long-term care insurance EXCEPT A Alternatives to the purchase of private long-term care insurance. B The effect of inflation in eroding the value of benefits and the importance of inflation protection. C Sales techniques and overcoming client objectives in the purchase of long-term care insurance. D Available long-term care services and facilities.
Sales techniques and overcoming client objectives in the purchase of long-term care insurance.
An insured purchased a 15-year level term life insurance policy with a face amount of $100,000. The policy contained an accidental death rider, offering a double indemnity benefit. The insured was severely injured in an auto accident, and after 10 weeks of hospitalization, died from the injuries. What amount would his beneficiary receive as a settlement? A $0 B $100,000 C $200,000 D $100,000 plus the total of paid premiums
$200,000
What is the waiting period on a Waiver of Premium rider in life insurance policies? A 30 days B 3 months C 5 months D 6 months
6 months
As part of the continuing education requirement, what is the minimum number of hours of continuing education specific to long-term care insurance to be completed prior to each license renewal? A 4 B 6 C 8 D 12
8
Which of the following annuity riders ensures that the owner will receive from an annuity at least the amount paid for the annuity? A Guaranteed Minimum Income B Guaranteed Minimum Accumulation C Guaranteed Lifetime Earning D Guaranteed Lifetime Withdrawal
Guaranteed Lifetime Withdrawal
Which of the following annuity riders ensures investors will receive a set amount of income annually? A Guaranteed Lifetime Earnings B Guaranteed Lifetime Withdrawal C Guaranteed Minimum Income Benefit D Guaranteed Minimum Accumulation Benefit
Guaranteed Minimum Income Benefit
Which of the following riders added to a life insurance policy can pay part of the death benefit to the insured to cover expenses incurred in a nursing or convalescent home? A Long-term care B Accidental death C Guaranteed insurability D Payor benefit
Long-term care
