Podcast
Questions and Answers
Which of the following best describes fixed-period settlement option?
Which of the following best describes fixed-period settlement option?
- The interest is paid in a lump sum.
- The benefits are paid in one lump sum.
- Both the principal and interest will be liquidated over a selected period of time. (correct)
- Only the principal is paid over time.
If an insured withdraws a portion of the face amount in the form of accelerated benefits because of a terminal illness, how will that affect the payable death benefit from the policy?
If an insured withdraws a portion of the face amount in the form of accelerated benefits because of a terminal illness, how will that affect the payable death benefit from the policy?
The death benefit will be smaller.
If a settlement option is not chosen by the beneficiary or policyowner, which option will be used?
If a settlement option is not chosen by the beneficiary or policyowner, which option will be used?
Lump sum
Which is NOT true about beneficiary designations?
Which is NOT true about beneficiary designations?
Which of the following statements about a suicide clause in a life insurance policy is true?
Which of the following statements about a suicide clause in a life insurance policy is true?
All of the following are Nonforfeiture options EXCEPT
All of the following are Nonforfeiture options EXCEPT
Which of the following settlement options in life insurance is known as straight life?
Which of the following settlement options in life insurance is known as straight life?
Children's riders attached to whole life policies are usually issued as what type of insurance?
Children's riders attached to whole life policies are usually issued as what type of insurance?
What is the clause that describes the method of paying the death benefit in the event that the insured and beneficiary are both killed in the same accident?
What is the clause that describes the method of paying the death benefit in the event that the insured and beneficiary are both killed in the same accident?
If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a
If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a
When the policyowner specifies a dollar amount in which installments are to be paid, he/she has chosen which settlement option?
When the policyowner specifies a dollar amount in which installments are to be paid, he/she has chosen which settlement option?
Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled?
Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled?
Life income joint and survivor settlement option guarantees
Life income joint and survivor settlement option guarantees
Which is true about a spouse term rider?
Which is true about a spouse term rider?
The interest earned on policy dividends is
The interest earned on policy dividends is
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Study Notes
Life Insurance Policy Riders and Options
- The fixed-period settlement option liquidates both the principal and interest over a selected time frame.
- Accelerated benefits for terminal illness decrease the overall death benefit of the policy.
- If a beneficiary or policyowner does not select a settlement option, the default is a lump sum payout.
- Beneficiaries do not need to have insurable interest in the insured.
- A suicide clause typically excludes coverage for a specified period before providing benefits thereafter.
- Nonforfeiture options in a policy exclude "interest only" as a valid option.
- The settlement option known as "straight life" refers to life income arrangements.
- Children's riders on whole life policies are generally issued as term insurance.
- A common disaster clause dictates the payment of death benefits if the insured and beneficiary die in the same accident.
- Guaranteed insurability rider allows for periodic increases in the face amount at standard rates without needing to prove insurability.
- Fixed amount settlement option involves specifying a dollar amount for periodic installments.
- The payor benefit ensures that a minor insured is relieved from premium payments if their parents die or become disabled.
- Life income joint and survivor settlement options provide income for two or more beneficiaries until the last one passes away.
- Spouse term riders are typically issued as level term insurance.
- The interest earned on policy dividends is subject to taxation.
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