Policy Provisions, Options and Riders

medical underwriting

A guaranteed issue insurance policy has no

fare-paying passenger

A life insurance policy normally contains a provision that restricts coverage in the event of death under all of the following situations EXCEPT

guaranteed insurability rider

A life insurance rider that allows an individual to purchase insurance as they grow older, regardless of insurability, is called a(n)

Reduction of premium dividend option

A policyowner may exercise which of these dividend options that uses the dividend to pay all or part of the next premium due?

nonforfeiture provision

A provision in a whole life policy that allows a policyowner to terminate the policy in return for a reduced paid-up policy of the same type is called a(n)

collateral assignment

A provision that allows a policyowner to temporarily give up ownership rights to secure a loan is called a(n)

nonforfeiture option

A whole life policy option where extended term insurance is selected is called a(n)

Reduction of Premium

All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT

Waiver of Premium

All of the following riders can increase the death benefit amount EXCEPT

accumulate without interest

All of these are valid policy dividend options for a life insurance policyowner EXCEPT

Guaranteed insurability rider

Barbara's policy includes a rider which allows her to purchase additional insurance at specific dates or events without evidence of insurability. This rider is called a(n)

the policy would be payable, minus the premium amount

If an insured dies during the grace period with no premiums paid

Declarations

In what part of an insurance policy are policy benefits found?

Net death benefit will be reduced if the loan is not repaid

Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value. She would like to borrow $15,000 against the cash value. Which of the following statements is TRUE?

would not be treated as taxable income

Loans obtained by a policyowner against the cash value of a life insurance policy

Accumulation at interest

Of the following dividend options, which of these is taxable?

The policy may be paid up early by using policy dividends

Pat owns a 20-pay life policy with a paid-up dividend option. Which of the following statements is true?

past due premiums that have not been paid by the end of the grace period

The automatic premium loan provision authorizes an insurer to withdraw from a policy's cash value the amount of

Entire Contract

What is the name of the provision which states that a copy of the application must be attached to the policy when issued?

Accumulation at Interest Option

Which dividend option would an insurer invest the policyowner's money and add any interest earnings as the dividends accrue?

Proof of insurabiilty

Which of the following is a reinstatement condition?

Accelerated death benefit rider

Which of the following is considered to be an alternative to a life settlement?

Life income annuity

Which of these is NOT considered to be a common life insurance nonforfeiture option?

Accelerated death benefit

Which of these is considered to be a Living Benefit option in a life insurance policy?

Exclusion

Which of these would limit a company's liability to provide insurance coverage?

Policy has a decreased face amount

Which situation accurately describes a reduced paid-up nonforfeiture option?

Payor benefit

Which type of rider will waive the premium on a child's life insurance policy if the parent paying the premium dies?