Missed Questions
An insured wants to name her husband as the beneficiary of her health policy. She also wishes to retain all of the rights of ownership. The insured should have her husband named as what type of beneficiary? a) Revocable b) Primary c) Contingent d) Irrevocable
a) Revocable If her husband is named as the revocable beneficiary, the insured would be the policyowner and could make changes to the contract. Her husband would receive any death benefit.
Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member? a) Children's rider b) Additional insured rider c) Family term rider d) Spouse rider
c) Family term rider A single rider that provides coverage on every family member is called a "family rider".
When the insured purchased his health policy he was a window washer. He has since changed occupations and now manages a library. If the insurer is notified of the insured's change of occupation, the insurer should a) Adjust the benefit in accordance with the decreased risk. b) Replace the policy with a new one. c) Return any unearned premium. d) Increase the premium.
a) Adjust the benefit in accordance with the decreased risk. Change of occupation provision allows the insurer to adjust benefits if the insured changes occupations.
In a replacement situation, all of the following must be considered EXCEPT a) Exclusions. b) Assets. c) Benefits. d) Limitations.
b) Assets. In a replacement situation the agent must be careful to compare the benefits, limitations and exclusions found in the current and the proposed replacement policy.
When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to? a) Pay back all premiums owed plus interest. b) Receive payments for a fixed amount. c) Purchase a single premium policy for a reduced face amount. d) Purchase a term rider to attach to the policy.
c) Purchase a single premium policy for a reduced face amount. When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used by the insurer as a single premium to purchase a completely paid up permanent policy that has a reduced face amount from that of the former policy.
Nonforfeiture values guarantee which of the following for the policyowner? a) That the policy premiums will never increase b) That the cash value will not be lost c) That the dividends will be paid annually d) That the death benefit will be paid in a lump sum
b) That the cash value will not be lost Because permanent life insurance policies have cash values, there are certain guarantees built into the policy that cannot be forfeited by the policyowner. Nonforfeiture values give the insured the right to the cash value even if the policy lapses or is surrendered.
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? a) 1 year b) 2 years c) 5 years d) 7 years
b) 2 years The incontestability clause prevents an insurer from denying a claim due to statements in the application after the policy has been in force for 2 years, even if there has been a material misstatement of facts or concealment of a material fact.