POLICY RIDERS, Provisions, Options & Exclusion
Which of the following statements is true of both the fixed-period and fixed-amount settlement option?
Both guarantee that the principal and interest will be fully paid out
Which of the following is NOT listed method that policyholders can use to designate minors as beneficiaries?
Cut a check for a minor to be cashed when they turn 18
Which of the following is NOT a standard exclusion in life insurance policies?
Disability
Which provision of a life insurance policy states that the application is part of the contract?
Entire contract
A spouse receives $5,000 a month until the principal and interest on her husband's life insurance policy have been paid out. Which settlement option did this beneficiary choose?
Fixed amount
What is the purpose of the return of premium rider?
Giving back fund for a term life insurance policy that were not used during the life of the policy
An insured missed paying their premium, but they still have coverage. Which provision or clause provides additional time to pay?
Grace Period
Which of the following features allows an insurance policy to remain in force for a specific number of days beyond the premium due date?
Grace period provision
Under what circumstances will the contingent beneficiary receive death benefits?
If the primary beneficiary dies before the insured
What provision allows the insurance company to cancel the policy due to fraud?
Incontestability Clause
A life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the
Incontestability clause
Which of the following is true of an automatic loan provision?
Insurance company deducts the amount of any outstanding premium from the policy's cash value after the grace period
Bob has a life insurance policy in which he cannot make any changes unless he consults and gets approval from the primary beneficiary. What type of policy is this?
Irrevocable
When a death benefit claim is submitted, the insurer discovered that the insured understated her age on the application for a life policy. What action will the insurer take?
Pay a reduced death benefit based on the insured's actual age
Which of the following terms references an ability for premiums to be paid for children if something happens to the policy owner?
Payor Benefit
What type of insurance is cash value life insurance?
Permanent Life Insurance
Which of the following is NOT a characteristic of a level-premium insurance policy?
The policy contains a savings component
Choose the BEST answer as it relates to beneficiaries?
There can be several beneficiaries where the benefits can be split by percentage or dollar amount
Which would a lender typically ask a borrower for a life insurance assignment?
To provide collateral for the loan
Joe has an insurance policy for his son, John. However, Joe cannot work for the next two months because he will be incapacitated due to surgery. Which type of rider will pay premiums during the time Joe is out of work?
Waiver of Monthly Deductions
The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called
Waiver of premium
What clause states that if you are a civilian in a war zone who dies, there may be no death benefit payout?
War Clause
How does a cash value life insurance policy loan work?
You take money out and then make additional payments on top premiums to reimbursee the amount over time
The insured usually pays $1,200 annually for her life insurance premium. This year, she has accumulated $175 in dividends, and applied that to her premium, reducing it to $1,025. What dividend option has the insured chosen?
Reduction of premium
Which of the following is NOT an ownership right in a life insurance policy?
Right to skip certain premium payments
What is a rider?
Somethings that adds options to customize an insurance policy
What are two types of life insurance policies?
Term and Whole Life
If a life insurance policy has an irrevocable beneficiary designation
The beneficiary can only be changed with written permission of the beneficiary
Which of the following statements about owner policy provision changes in a life insurance policy is NOT accurate?
The owner must submit a written request to the insurance company to change policy premiums
Which of the following is true about the free-look period in a life insurance policy?
It starts when the policy is delivered
What does the settlement option of specific income do?
It allows the insured to choose a specific income they believe the beneficiary needs and then pay the premiums.
All of the followings are true regarding the guaranteed insurability rider EXCEPT
It is available automatically, for no extra premium
Which settlement option allows a beneficiary to pass it on to another?
Joint & Survivorship Life
What settlement option will provide a full pay out of the death benefit but likely not for weeks?
Lump Sum
Let's say that Edward has an insurance policy for $10,000, uses $50,000 for other Accelerated Death Benefit, and passes away. How much money will his sole beneficiary receive?
$5,000
Sue has just been diagnosed with a very aggressive form of cancer, and the doctor tells her she only has six months left. Which of the following will help her?
Accelerated Death Rider
What are two unique limit and exculsions?
Acts of War and Risk
Which of the following term refers to the transfer of some or all of the ownership rights of a insurance policy from one individual to another?
Assignment
Which of the following parties in an assignment contract grants the ownership rights to another person?
Assignor
All of the following are nonforfeiture options in life insurance policies EXCEPT
Automatic premium loans
Which of the following is an example of how an individual can qualify for Accelerated Death Benefit?
Be diagnosed with a terminal illness
In which of the following situations would an owner NOT consider canceling or surrendering a life insurance policy?
Birth or a new baby
Which rider adds coverage for children?
Child Rider