Podcast
Questions and Answers
A life insurance policy can only be voided if discovered during the Contestable period and proven to be material.
A life insurance policy can only be voided if discovered during the Contestable period and proven to be material.
True (A)
What feature in a life insurance policy states that the policy will not cover certain risks?
What feature in a life insurance policy states that the policy will not cover certain risks?
- Waiver
- Inclusion
- Endorsement
- Exclusion (correct)
What provision in a life insurance policy states that the application is considered part of the contract?
What provision in a life insurance policy states that the application is considered part of the contract?
Entire Contract provision
In the scenario where P dies in a scuba-related accident, what will the insurer pay to P's beneficiary?
In the scenario where P dies in a scuba-related accident, what will the insurer pay to P's beneficiary?
What action can a policyowner take if an application for a bank loan requires collateral?
What action can a policyowner take if an application for a bank loan requires collateral?
Which of the following provisions guarantees that premiums will be waived if a Juvenile Life policyowner becomes disabled?
Which of the following provisions guarantees that premiums will be waived if a Juvenile Life policyowner becomes disabled?
What will happen under the Misstatement of Age provision if L understated her age on the application?
What will happen under the Misstatement of Age provision if L understated her age on the application?
Past-due interest on a policy loan is not added to the total debt.
Past-due interest on a policy loan is not added to the total debt.
Which of the following is NOT an example of a Nonforfeiture option?
Which of the following is NOT an example of a Nonforfeiture option?
Coverage will be adjusted to reflect the insured's true age if a misstatement of age is discovered.
Coverage will be adjusted to reflect the insured's true age if a misstatement of age is discovered.
How are surrender charges deducted in a life policy with a rear-end loaded provision?
How are surrender charges deducted in a life policy with a rear-end loaded provision?
The Consideration clause in a life insurance policy indicates that a policyowner's consideration consists of what?
The Consideration clause in a life insurance policy indicates that a policyowner's consideration consists of what?
What provision will keep a Whole Life policy in force if payment is not made?
What provision will keep a Whole Life policy in force if payment is not made?
What does the insuring agreement in a Life insurance contract establish?
What does the insuring agreement in a Life insurance contract establish?
What is the Accelerated Death Benefit provision in a life insurance policy also known as?
What is the Accelerated Death Benefit provision in a life insurance policy also known as?
When is the face amount of a Whole Life policy paid?
When is the face amount of a Whole Life policy paid?
Accelerated death benefits do not provide for the early payment of the policy face amount.
Accelerated death benefits do not provide for the early payment of the policy face amount.
In a Life insurance contract, an insurance company's promise to pay stated benefits is called the?
In a Life insurance contract, an insurance company's promise to pay stated benefits is called the?
Whose life is covered on a life insurance policy that contains a payor benefit clause?
Whose life is covered on a life insurance policy that contains a payor benefit clause?
What feature would limit the insurer's obligation if N is killed while flying as a student pilot?
What feature would limit the insurer's obligation if N is killed while flying as a student pilot?
What provision of life insurance policy pays a stated benefit amount if the insured is blinded in an industrial accident?
What provision of life insurance policy pays a stated benefit amount if the insured is blinded in an industrial accident?
What does the ownership clause in a life insurance policy state?
What does the ownership clause in a life insurance policy state?
If an insured dies within the grace period without making the premium payment, what action will the insurer take?
If an insured dies within the grace period without making the premium payment, what action will the insurer take?
If an individual covered by a Term Life policy does not make the required premium payment and dies, what action will the insurer take?
If an individual covered by a Term Life policy does not make the required premium payment and dies, what action will the insurer take?
A policy loan is made possible by which life insurance policy feature?
A policy loan is made possible by which life insurance policy feature?
What is the purpose of the Suicide provision in life insurance?
What is the purpose of the Suicide provision in life insurance?
Which Whole Life policy accumulates cash value faster in the early years?
Which Whole Life policy accumulates cash value faster in the early years?
What does the Accidental Death and Dismemberment (AD&D) provision pay?
What does the Accidental Death and Dismemberment (AD&D) provision pay?
What rider ensures premium will be paid if the insured becomes disabled?
What rider ensures premium will be paid if the insured becomes disabled?
Which statement about a policy's Grace period is NOT true?
Which statement about a policy's Grace period is NOT true?
What may trigger a benefit under a long-term care rider?
What may trigger a benefit under a long-term care rider?
Which statement about Settlement Options is NOT true?
Which statement about Settlement Options is NOT true?
What benefit does the Payor clause on a Juvenile Life policy provide?
What benefit does the Payor clause on a Juvenile Life policy provide?
Which rider typically appears on a Juvenile life insurance policy?
Which rider typically appears on a Juvenile life insurance policy?
Inability to perform two or more activities of daily living may trigger which type of policy rider?
Inability to perform two or more activities of daily living may trigger which type of policy rider?
How can Variable Whole Life Insurance be described?
How can Variable Whole Life Insurance be described?
Which type of policy may NOT have the Automatic Premium Loan provision?
Which type of policy may NOT have the Automatic Premium Loan provision?
What is the Reinstatement provision used for?
What is the Reinstatement provision used for?
Which rider provides coverage for a child under a parent's life insurance policy?
Which rider provides coverage for a child under a parent's life insurance policy?
What is the insuring agreement in a life insurance contract?
What is the insuring agreement in a life insurance contract?
What amount will D's beneficiary receive if he dies while covered under a Whole Life policy with a War Exclusion clause?
What amount will D's beneficiary receive if he dies while covered under a Whole Life policy with a War Exclusion clause?
What will the beneficiary receive if an insured dies during the Grace Period without paying past due premiums?
What will the beneficiary receive if an insured dies during the Grace Period without paying past due premiums?
What is an exclusion in an insurance policy?
What is an exclusion in an insurance policy?
When may a Guaranteed Insurability Rider allow the insured to buy additional coverage?
When may a Guaranteed Insurability Rider allow the insured to buy additional coverage?
Which Dividend Option should a teacher select for an increasing Death Benefit?
Which Dividend Option should a teacher select for an increasing Death Benefit?
What kind of rider did S include on the policy if the insurer paid the beneficiary $10,500?
What kind of rider did S include on the policy if the insurer paid the beneficiary $10,500?
If T commits suicide five years after taking a life insurance policy with AD&D rider, how much will the insurer pay?
If T commits suicide five years after taking a life insurance policy with AD&D rider, how much will the insurer pay?
What does B's guaranteed insurability option allow him to purchase?
What does B's guaranteed insurability option allow him to purchase?
What information does the Consideration clause contain?
What information does the Consideration clause contain?
What is a Return of Premium life insurance policy?
What is a Return of Premium life insurance policy?
If D remarries and transfers ownership of his policy, who will the policy proceeds be paid to if he dies?
If D remarries and transfers ownership of his policy, who will the policy proceeds be paid to if he dies?
What action is taken when a policyowner uses a Life Insurance policy as collateral for a bank loan?
What action is taken when a policyowner uses a Life Insurance policy as collateral for a bank loan?
How is accumulated interest earned on dividends from an insurance policy taxed?
How is accumulated interest earned on dividends from an insurance policy taxed?
Which Dividend option results in taxable income to the policyowner?
Which Dividend option results in taxable income to the policyowner?
What type of life insurance allows level premiums and investment choices?
What type of life insurance allows level premiums and investment choices?
What does the Owner's Rights provision state?
What does the Owner's Rights provision state?
How can additional coverage be added to a Whole Life policy?
How can additional coverage be added to a Whole Life policy?
What action will an insurer take if interest payment on a policy loan is late?
What action will an insurer take if interest payment on a policy loan is late?
What is the purpose of the automatic premium loan provision?
What is the purpose of the automatic premium loan provision?
Which statement about the Waiver of Premium provision is NOT true?
Which statement about the Waiver of Premium provision is NOT true?
What does a policy loan provision state?
What does a policy loan provision state?
Which life insurance rider allows the applicant to have excess coverage?
Which life insurance rider allows the applicant to have excess coverage?
Which of these is NOT considered a right given to a policyowner?
Which of these is NOT considered a right given to a policyowner?
What will happen if premiums are waived due to a disability on a participating life policy?
What will happen if premiums are waived due to a disability on a participating life policy?
What type of life policy contains a monthly mortality charge and self-directed investment choices?
What type of life policy contains a monthly mortality charge and self-directed investment choices?
What happens if an insured commits suicide within the contestable period?
What happens if an insured commits suicide within the contestable period?
If material misrepresentations are discovered after a life insurance policy is in force, what action will the insurer take?
If material misrepresentations are discovered after a life insurance policy is in force, what action will the insurer take?
When a misrepresentation on a life insurance policy application is discovered, what action may an insurance company take?
When a misrepresentation on a life insurance policy application is discovered, what action may an insurance company take?
Study Notes
Policy Provisions, Options, and Riders
- Accidental Death and Dismemberment Clause pays a specified benefit for accidental death or loss of limbs/sight.
- Ownership Clause defines who owns the policy and their rights.
- Death within grace period after premium due results in payout minus past-due premiums.
- Term Life Policy lapses if premium isn't paid; death claim is denied if lapsed.
- Cash Value Provision enables policy loans against accumulated cash value.
- Suicide Provision protects insurers from claims made shortly after policy issuance.
- 20-Pay Life accumulates cash value more rapidly than Straight Life policies.
- Waiver of Premium Rider covers premiums if the insured becomes disabled.
- Grace Period does not waive past due premiums.
- Long-Term Care Rider activates when the insured cannot perform 2+ Activities of Daily Living (ADLs).
- Beneficiary clearly selects Settlement Options; other statements regarding them are substantiated.
- Payor Clause waives premiums for juvenile policies if the payor becomes disabled.
- Child Term Rider offers coverage for children under a parent's life insurance policy.
- Variable Whole Life Insurance merges insurance with investment components.
- Reinstatement Provision allows lapsed policies to be reinstated with conditions.
- Insuring Agreement specifies the sum paid upon the insured's death.
- War Exclusion Clause might exempt payout if death occurs while engaged in military service.
- Policy Loans can lead to reduced payout if the insured dies with an outstanding loan balance.
- Incontestable Clause limits insurer's ability to contest claims after a specific period, typically two years.
- Accumulated Interest on Dividends is subject to taxation as ordinary income.
- Guaranteed Insurability Option allows purchasing additional coverage without proof of insurability at specified future dates.
- Dividend Options impact coverage, such as selecting Paid-Up Additional Insurance to combat inflation.
- Return of Premium Rider equates policy's death benefit to premiums paid if the insured passes away within a specific timeframe.
- Collateral Assignment is used for securing bank loans with life insurance policies.
- Reduced Paid-Up Option maintains a build-up in cash value after ceasing premium payments.
- If the insured dies past the Contestable Period with misrepresentations, the claimed benefit is generally honored.
- Exclusions in Policies detail certain uninsurable risks.
- Entire Contract Provision denotes that the written policy, application, and riders represent the full agreement.
- Death benefits can be altered due to misrepresentation regarding age that was understated.
- Premiums on a juvenile life policy can be waived if the policyholder becomes disabled due to the Payor Clause.
- Policies can be assigned to banks as collateral for loans, providing flexibility to policyowners.### Policy Loans and Interest
- Unpaid interest on a policy loan increases the total debt owed under the policy.
Nonforfeiture Options
- Options available include Extended Term, Reduced Paid-up, and Cash Surrender.
- Life Income is NOT a Nonforfeiture option.
Misstatement of Age
- Misstating age can lead to adjustments in coverage to match the insured’s correct age upon discovery.
Surrender Charges
- In policies with rear-end loaded provisions, surrender charges are applied when the policy is discontinued.
Consideration Clause
- A policyowner’s consideration comprises the completed application and the initial premium payment.
Automatic Policy Loan Provision
- This provision ensures a Whole Life policy remains in effect by covering premium payments from available cash value if payments are missed.
Insuring Agreement
- The insuring agreement constitutes the insurer's fundamental promise to provide specified benefits under the life insurance contract.
Accelerated Death Benefit
- Also referred to as Living Benefits, this provision allows for early payment from the policy face amount in cases of terminal illness or injury.
Life Insurance Contract
- The insuring clause specifies the insurance company's commitment to pay designated benefits.
Payor Benefit Clause
- This clause applies to policies covering juvenile lives and ensures continuous insurance coverage if the premium-paying adult dies or becomes totally disabled.
Exclusions in Policies
- Exclusions identify specific hazards or circumstances, such as flying as a student pilot, that limit the insurer's liability for benefits under the policy.
Studying That Suits You
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Description
Test your knowledge on key life insurance policy provisions, options, and riders with this flashcard quiz. Each question dives into critical concepts such as Accidental Death and Dismemberment clauses and ownership clauses. Perfect for anyone studying life insurance or preparing for relevant exams.
