Policy Provision

Question 1

The suicide clause of a life insurance policy states that if an insured commits suicide within a stated period from the policy’s inception, insurer will only be liable for a return of premiums paid

Answer 1

Minus indebtedness and without interest

Question 2

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

Answer 2

accumulate without interest

Question 3

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

Answer 3

fare-paying passenger

Question 4

Life insurance will normally pay for losses arising from ?

Answer 4

Commercial aviation

Question 5

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) ___?

Answer 5

Guaranteed insurability rider

Question 6

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

Answer 6

Policy has a decreased face amount

Question 7

A life insurance policyowner does NOT have the right to ?

Answer 7

revoke an absolute assignment

Question 8

The two major actions required for a policyholder to comply with Reinstatement Clause are ?

Answer 8

1) provide evidence of insurability, 2) pay past due premiums

Question 9

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

Answer 9

Collateral assignment

Question 10

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

Answer 10

Exclusion

Question 11

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) ___?

Answer 11

Nonforfeiture provision

Question 12

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?

Answer 12

$4,000

Question 13

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 ____

Answer 13

dies instantly from a car accident

Question 14

The free-look provision gives the policyowner?

Answer 14

the right to return the policy for a full refund within a specified number of days

Question 15

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

Answer 15

The policy may be paid up early by using policy dividends

Question 16

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

Answer 16

Waiver of Premium

Question 17

Which of these is considered to be a living benefit option in life insurance policy?

Answer 17

Accelerated death benefit

Question 18

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

Answer 18

Accelerated death benefit rider

Question 19

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

Answer 19

Accumulation at Interest Option

Question 20

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

Answer 20

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

Question 21

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

Answer 21

Declarations

Question 22

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

Answer 22

Guaranteed insurability rider

Question 23

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

Answer 23

Reduction of premium

Question 24

What is NOT considered to be nonforfeiture option in a whole life insurance policy?

Answer 24

Interest only

Question 25

Ownership of a life insurance policy may be temporarily transferred with a(n) ___?

Answer 25

Collateral assignment

Question 26

An insured individual and the policy's beneficiary die from the same accident. The common disaster provision states the insurer will continue as if

Answer 26

the insured outlived the beneficiary

Question 27

Under a life insurance policy, what does the insuring clause state?

Answer 27

The insurer's obligation to pay a death benefit upon an approved death claim.

Question 28

An endorsement found in an insurance plan which modified the provision of policy is called a(n)___?

Answer 28

Rider

Question 29

In order to activate the reinstatement clause of a lapse life insurance policy, the insured MUST ___?

Answer 29

Provide evidence of insurability to the insurer

Question 30

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?

Answer 30

grace period

Question 31

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

Answer 31

Life income annuity

Question 32

A waiver of premium rider allows an insured to waive premium payments if the insured is ___?

Answer 32

Completely and permanently disabled

Question 33

What is an insurer required to do when faced with an error made under the Misstatements of Age provision?

Answer 33

Pay age-corrected benefits

Question 34

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

Answer 34

Entire Contract

Question 35

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

Answer 35

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

Question 36

What is the purpose for having an accelerated death benefit on a life insurance policy?

Answer 36

It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill

Question 37

A guaranteed issue insurance policy has no

Answer 37

medical underwriting

Question 38

A provision that allows a policyowner to withdraw a policy's cash value interest free a(n) ___?

Answer 38

Partial surrender

Question 39

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?

Answer 39

Net death benefit will reduce if not loss is not repeated

Question 40

NOT part of an insurance contract?

Answer 40

Certificate of authority

Question 41

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

Answer 41

The policy would be payable, minus the premium amount

Question 42

A life insurance policyowner was injured in an automatic accident which results in a total and permanent disability. Which rider would pay a monthly amount because of this disability?

Answer 42

Disability income rider

Question 43

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

Answer 43

Reduction of premium dividend options

Question 44

Kurt in active duty serviceman who was recently killed in an accident while home on leave. Which military service exclusion clause would pay upon his death?

Answer 44

Results

Question 45

Under a life insurance policy, what does the insuring clause state?

Answer 45

The insurer's obligation to pay a death benefit upon an approved death claim

Question 46

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

Answer 46

Payor benefit

Question 47

If an insured's age on life insurance policy has been misstated what is the insurer's liability if the insure dies?

Answer 47

A prorated death benefit based on the amount of insurance the insured's premiums would have been if purchased at the correct age.

Question 48

Which of these dividends options are taxable?

Answer 48

Accumulation at interest

Question 49

NOT a characteristic of the Accelerated Death Benefit option?

Answer 49

benefit can be offered as a rider at a specific extra cost or may be at no cost

Question 50

In order to activate the reinstatement clause of a lapsed life insurance policy, the insured MUST ___?

Answer 50

Provide evidence of insurability to the insurer

Question 51

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?

Answer 51

Age