Which of these is NOT a characteristic of the Accelerated Death Benefit option?
The face amount and policy premium are not affected by the payment
Before payment of the benefit is made, specific conditions must exist, such as suffering from a terminal ill
The benefit can be offered as a rider at a specific extra cost or may be at no cost
Of the following dividend options, which of these is taxable?
Reduction of premium
One year term
Paid-up additions
Accumulation at interest
Accumulation at interest
Which of these is considered to be a Living Benefit option in a life insurance policy?
Reinstatement
Waiver of premium
Accelerated death benefit
Payor benefit
Accelerated death benefit
What is the name of the provision which states that a copy of the application must be attached to the policy when issued?
Policy Summary
Buyer's Guide
Entire Contract
Entire Policy
Entire Contract
In what part of an insurance policy are policy benefits found?
Declarations
Entire contract
Waivers
Conditions
Declarations
A provision that allows a policyowner to withdraw a policy's cash value interest free is a(n)
partial surrender
waiver of premium
automatic premium loan
grace period
partial surrender
The double indemnity provision in a life insurance policy pertains to an insured's death caused by a(n)
sickness
suicide
accident
war
accident
A provision that allows a policyowner to temporarily give up ownership rights to secure a loan is called a(n)
automatic premium loan
nonforfeiture option
collateral assignment
irrevocable assignment
collateral assignment
All of these are standard exclusions found in a life insurance policy EXCEPT
hazardous occupations
aviation
disability
war
disability
Which dividend option would an insurer invest the policyowner's money and add any interest earnings as the dividends accrue?
Accumulation at Interest Option
Cash Dividend Option
Paid-Up Additions Option
One-Year Term Dividend Option
Accumulation at Interest Option
Which situation accurately describes a reduced paid-up nonforfeiture option?
Policy has a decreased face amount
Face amount of the new policy equals that of the original policy
Cash value is surrendered to policyowner
Premiums must continue to be paid
Policy has a decreased face amount
Which of the following protects a policyowner from a misrepresentation caused by an innocent mistake?
Reinstatement clause
Entire Contract clause
Incontestable clause
Nonforfeiture clause
Incontestable clause
All of the following riders can increase the death benefit amount EXCEPT
Cost of Living
Waiver of Premium
Accidental Death Rider
Guaranteed Insurability
Waiver of Premium
In order to activate the reinstatement clause of a lapsed life insurance policy, the insured MUST
remit all past-due premiums within the grace period
provide evidence of insurability to the insurer
resubmit a new life insurance application
provide a valid
provide evidence of insurability to the insurer
Which of these is NOT considered to be a common life insurance nonforfeiture option?
Cash surrender
Extended term insurance
Reduced paid-up insurance
Life income annuity
Life income annuity
Which of these is NOT considered to be a nonforfeiture option in a whole life insurance policy?
Interest only
Reduced paid-up insurance
Extended term insurance
Cash surrender
Interest only
Matt is applying for life insurance and requests a double indemnity rider. A double indemnity benefit will be payable to Matt's beneficiary if Matt
is killed while committing a felony
dies of a stroke
dies instantly from a car accident
is injured in a ski
dies instantly from a car accident
The two major actions required for a policyholder to comply with the Reinstatement Clause are
provide evidence of insurability, agree to a new incontestable period
provide evidence of insurability, pay past due premiums
pay past due premiums, agree to a n
provide evidence of insurability, pay past due premiums
Which type of rider will waive the premium on a child's life insurance policy if the parent paying the premium dies?
Waiver of premium
Juvenile waiver
Guaranteed insurability
Payor benefit
Payor benefit
A life insurance policy normally contains a provision that restricts coverage in the event of death under all of the following situations EXCEPT
fare-paying passenger
pilot of personal airplane
suicide
war
fare-paying passenger
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?
Net death benefit will be reduced if the loan is not repaid
No interest
Net death benefit will be reduced if the loan is not repaid
The suicide clause of a life insurance policy states that if an insured commits suicide within a stated period from the policy's inception, the insurer will only be liable for a return of premiums paid
minus indebtedness and with interest
during the last
minus indebtedness and without interest
The free-look provision gives the policyowner
the right to return the policy for a partial refund within a specified number of days
the right to contest the terms of the policy
the right to change a policy provision
the right to return the policy for a fu
the right to return the policy for a full refund within a specified number of days
A guaranteed issue insurance policy has no
initial premium requirement
incontestable period
waiting period
medical underwriting
medical underwriting
Which of these would limit a company's liability to provide insurance coverage?
Waiver
Exclusion
Rider
Provision
Exclusion
A life insurance rider that allows an individual to purchase insurance as they grow older, regardless of insurability, is called a(n)
guaranteed term rider
guaranteed insurability rider
accelerated benefit rider
cost of living rider
guaranteed insurability rider
Loans obtained by a policyowner against the cash value of a life insurance policy
are treated as taxable income
would not be treated as taxable income
are limited by the face amount of the policy
would be subject to a Federal estate tax
would not be treated as taxable income
All of these are common exclusions to a life insurance policy EXCEPT
accidental death
military service
aviation
hazardous occupations
accidental death
The automatic premium loan provision authorizes an insurer to withdraw from a policy's cash value the amount of
any interest payable from an outstanding policy loan balance
past due premiums that have not been paid by the end of the grace period
the outst
past due premiums that have not been paid by the end of the grace period
All of these are valid options for what a policyowner may do with policy dividends EXCEPT
cash outlay to the policyowner
accumulate without interest
reduction in policy premium
buy additional insurance coverage
accumulate without interest
Dorian exercised a nonforfeiture option by using his life policy's cash value to purchase an extended term insurance option. When the term insurance expires,
he has the option of resuming the original policy and paying the same premium
the coverage can be
the protection ends
A waiver of premium rider allows an insured to waive premium payments if the insured is
temporarily disabled
unemployed
completely and permanently disabled
experiencing financial hardship
completely and permanently disabled
A whole life insurance policy accumulates cash value that becomes
the policy loan value which the insured may borrow against
the death benefit
the source of funding for administration fees
a source of funding a term rider to the policy
the policy loan value which the insured may borrow against
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)
insuring clause
payor provision
reinstatement provision
nonforfeiture provision
nonforfeiture provision
What is an insurance policy's grace period?
Period of time after the initial premium is paid and before the policy is issued
Period of time it takes for a policy's underwriting to complete
Period of time after a policy is issued and before it is delivered
Period of time after the premium is due but the policy remains in force
If an insured's age on a life insurance policy has been misstated, what is the insurer's liability if the insured dies?
No death benefit is owed because of the misstatement of age
The full original death benefit listed on the policy
A prorated death benef
A prorated death benefit based on the amount of insurance the insured's premiums would have been if purchased at the correct age
An insured individual and the policy's beneficiary die from the same accident. The common disaster provision states the insurer will continue as if
the insured outlived the beneficiary
the beneficiary outlived the insured
no beneficiary was ever named
the
the insured outlived the beneficiary
All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT
Extended Term Insurance
Cash Surrender
Reduction of Premium
Reduced Paid-Up Insurance
Reduction of Premium
A life insurance policyowner does NOT have the right to
change a beneficiary
select a beneficiary
take out a policy loan
revoke an absolute assignment
revoke an absolute assignment
Kurt is an active duty serviceman who was recently killed in an accident while home on leave. Which military service exclusion clause would pay upon his death?
Active
Status
Results
Leave
Results
If an insured dies during the grace period with no premiums paid
the policy would be payable, minus the premium amount
the policy would be payable only after the beneficiary makes past due premium payment
all past premiums will be refunded with interest
t
the policy would be payable, minus the premium amount
Ron has a life insurance policy with a face value of $100,000 and a cost of living rider. If the consumer price index has gone up 4%, how much may Ron increase the face value of the policy?
$400
$800
$2,000
$4,000
$4,000
A rider that assures premiums will be paid on a juvenile policy until the child reaches a specific age is called a(n)
waiver of premium rider
payor rider
automatic premium loan rider
juvenile waiver rider
payor rider
Life insurance policies will normally pay for losses arising from
commercial aviation
war
suicide
hazardous jobs
commercial aviation
A policyowner may exercise which of these dividend options that uses the dividend to pay all or part of the next premium due?
Reduction of premium dividend option
Extended term option
Paid-up option
Cash dividend option
Reduction of premium dividend option
An insurer will accept a premium from the insured and continue the coverage in full force as though it was NOT late during which time period?
Incontestable period
Probation period
Reinstatement period
Grace period
Grace period
James is the insured on a life insurance policy where his age was misstated on the application. Which of the following is CORRECT regarding the death benefit amount?
The original face amount will be paid to the beneficiary
The policy will be voided with n
The death benefit paid will be what the premium would have purchased at the correct age
Which of the following is considered to be an alternative to a life settlement?
Accelerated death benefit rider
Waiver of premium rider
Extended term option
Decreasing term insurance
Accelerated death benefit rider
What is an insurer required to do when faced with an error made under the Misstatement of Age provision?
Cancel the policy
Pay age-corrected benefits
Pay full benefits as stated in the policy
Bill the policyowner for back premiums
Pay age-corrected benefits
An error was made on Mary's life insurance application. Which of the following areas are errors commonly made on applications for which the incontestable clause does NOT apply?
Marital status
Age
Address
Income
Age
Ownership of a life insurance policy may be temporarily transferred with a(n)
collateral assignment
absolute assignment
transferable assignment
beneficiary assignment
collateral assignment