When the primary beneficiary dies before the insured
A contingent beneficiary will receive a death benefit from a life insurance policy when...
Incontestability
Life insurance policy provision that prevents an insurer from disputing or denying a claim due to misstatements on the application after a certain period of time
Purpose of settlement options
Determines how the death benefit will be paid to the beneficiary
Lump-sum payment
If a settlement option is not chosen by the policy owner or the beneficiary, the __ option will be used
Policy premium will be set according to the insured's original age
___ is the advantage of reinstating a life insurance policy as opposed to applying for a new one
Extended term
Nonforfeiture option that is automatically selected by the company if not chosen by the policyowner
War, hazardous occupation, and aviation
___ are the most common exclusions in life insurance policies
When the suicide is committed within a specified period of time after the policy is purchased
An insurance company can use suicide as a defense against paying a claim when __
Paid-up additions
Dividend option that can increase the death benefit of the existing life policy
The balance of the principal will be forfeited if the beneficiary dies after payments
__ is the disadvantage of selecting the life income settlement option
Entire contract
Life insurance policy provision that states that both the policy and a copy of the application form the contract between the policy owner and the insurer
Revocable
Type of beneficiary that can be changed at any point by the policyowner
Settlement options
Term used to describe settlement methods of payment of the death benefit to the beneficiary upon the insured's death.
The longer the period selected, the smaller each installment will be
In the fixed-period settlement option, the number of installments for the death benefit proceeds determine the amount of installments by __
Cash value is converted to the same face amount as in the whole life policy
__ happens to a policy's cash value under an extended term nonforfeiture option
Representations
__ are statements on the application made by an applicant for a life insurance policy
Policy proceeds are retained by the insurance company & only the interest is paid to the beneficiary
With the interest only settlement option, __ happens to the policy's death benefit
Reduced paid-up
Nonforfeiture option that provides coverage for the longest period of time
Reinstatement
Provision that allows the policy owner to reactivate a lapsed life insurance policy within a specified period of time with proof of insurability
A promise to pay policy benefits
Consideration on the part of the insurer is __
Lump-sum, fixed period, fixed amount, life income, interest only
__ are settlement options that are available in life insurance policies.
Pay a reduced death benefit
An insurer has discovered a representation on a life insurance policy application regarding the insured's age. The insured is 10 years older than he stated on the application. __ is what the insurer will do in regards to the death benefit
Policyowner
__ has the right to the cash value of a life insurance policy
Allow the insured to return the policy with a full refund
__ is the purpose of a free-look period
The contingent beneficiary
The common disaster clauses protects __
Grace period
Provision in a life insurance policy that extends coverage beyond the premium due date
Grace Period
Required provision that protects against unintentional policy lapse
Applying it to the next year's premium
With reduction of premium dividend option, the dividend is used by __
Cash surrender, reduced paid-up, extended term
The three nonforfeiture options in life insurance policies
Representations
Statements made by the applicant that are true to the best of the applicant's knowledge
Cash surrender
Under __ nonforfeiture option, the company pays the policy's surrender value and has no further obligations to the policyowner
Waiver of premium
Life policy rider that allows the company to forgo collecting the premium if the insured becomes disabled
Primary Beneficiary
Beneficiary designation that has first claim to the death proceeds of a life insurance policy
It may alter the underwriting decision
A misrepresentation would be considered material when __
Determine how the death benefit will be paid to the beneficiary
The purpose of settlement options in life insurance policies is
If the beneficiary dies shortly after the payments begin, the balance of the principal will be forfeited
__ is the disadvantage of selecting the life income settlement option
Yes, since the suicide was committed long after the restricting period
An insured purchased a life policy, and then committed suicide 5 years later. Will the company pay the death benefit to the beneficiary?
Prevent the unintentional lapse of policy because of nonpayment of the premium
The purpose of the Automatic Premium Loan provision is __.
Other-insured rider
Life insurance policy rider that provides coverage on the insured's family members
Absolute assignment
Requires transfer of all ownership rights in the policy to a third party
Double Indemnity
When an insurer pays a benefit of twice the face amount
Policyowner
__ controls changes in premium payments, face values, and loans in a life insurance policy
A copy of the original insurance application
To meet the requirement of the entire contract policy provision, an insurance policy must contain __
The beneficiary
___ does not have to have insurable interest in the insured
...
An insured purchased a life policy, and then committed suicide 5 years later. Will the company pay the death benefit to the beneficiary?