Podcast
Questions and Answers
This person's policy includes a rider which allows her to purchase additional insurance at specific dates or events without evidence of insurability. What is this rider called?
This person's policy includes a rider which allows her to purchase additional insurance at specific dates or events without evidence of insurability. What is this rider called?
If an insured's age on a life insurance policy has been misstated, what is the insurer's liability if the insured dies?
If an insured's age on a life insurance policy has been misstated, what is the insurer's liability if the insured dies?
A prorated death benefit based on the amount of insurance the insured's premiums would have been if purchased at the correct age.
A life insurance rider that allows an individual to purchase insurance as they grow older, regardless of insurability, is called a(n):
A life insurance rider that allows an individual to purchase insurance as they grow older, regardless of insurability, is called a(n):
Loans obtained by a policyowner against the cash value of a life insurance policy are treated as taxable income.
Loans obtained by a policyowner against the cash value of a life insurance policy are treated as taxable income.
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What is NOT a valid policy dividend option for a life insurance policyowner?
What is NOT a valid policy dividend option for a life insurance policyowner?
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What is TRUE regarding the death benefit amount if a person's age was misstated on the application?
What is TRUE regarding the death benefit amount if a person's age was misstated on the application?
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A Guaranteed Issue Insurance policy has no medical underwriting.
A Guaranteed Issue Insurance policy has no medical underwriting.
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What does it mean if a policy has a paid-up dividend option?
What does it mean if a policy has a paid-up dividend option?
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What is a whole life policy option where extended term insurance is selected called?
What is a whole life policy option where extended term insurance is selected called?
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What is an insurer required to do when faced with an error made under the Misstatement of Age provision?
What is an insurer required to do when faced with an error made under the Misstatement of Age provision?
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What is NOT a standard exclusion found in a life insurance policy?
What is NOT a standard exclusion found in a life insurance policy?
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What dividend option is taxable?
What dividend option is taxable?
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The double indemnity provision in a life insurance policy pertains to an insured's death caused by a(n):
The double indemnity provision in a life insurance policy pertains to an insured's death caused by a(n):
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What applies when the policyowner's death occurs due to an accident?
What applies when the policyowner's death occurs due to an accident?
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What is TRUE about borrowing against the cash value of a $100,000 whole life policy with an accumulated $25,000 of cash value?
What is TRUE about borrowing against the cash value of a $100,000 whole life policy with an accumulated $25,000 of cash value?
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Which situation accurately describes a reduced paid-up nonforfeiture option?
Which situation accurately describes a reduced paid-up nonforfeiture option?
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The automatic premium loan provision authorizes an insurer to withdraw from a policy's cash value the amount of:
The automatic premium loan provision authorizes an insurer to withdraw from a policy's cash value the amount of:
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Ownership of a life insurance policy may be temporarily transferred with a(n):
Ownership of a life insurance policy may be temporarily transferred with a(n):
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In order to activate the reinstatement clause of a lapsed life insurance policy, the insured MUST:
In order to activate the reinstatement clause of a lapsed life insurance policy, the insured MUST:
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What is NOT considered to be a common life insurance nonforfeiture option?
What is NOT considered to be a common life insurance nonforfeiture option?
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What is the name of the provision which states that a copy of the application must be attached to the policy when issued?
What is the name of the provision which states that a copy of the application must be attached to the policy when issued?
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A life insurance policyowner injured in an automobile accident which results in a total and permanent disability would be covered by which rider?
A life insurance policyowner injured in an automobile accident which results in a total and permanent disability would be covered by which rider?
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What is the purpose of having an accelerated death benefit on a life insurance policy?
What is the purpose of having an accelerated death benefit on a life insurance policy?
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A rider that assures premiums will be paid on a juvenile policy until the child reaches a specific age is called a(n):
A rider that assures premiums will be paid on a juvenile policy until the child reaches a specific age is called a(n):
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A double indemnity benefit will be payable to the beneficiary if the insured dies instantly from a car accident.
A double indemnity benefit will be payable to the beneficiary if the insured dies instantly from a car accident.
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If an insured dies during the grace period with no premiums paid, what happens?
If an insured dies during the grace period with no premiums paid, what happens?
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What is NOT part of an insurance contract?
What is NOT part of an insurance contract?
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Study Notes
Life Insurance Concepts
- A Guaranteed Insurability Rider allows policyholders to purchase additional insurance without proof of insurability at certain times.
- If an insured's age is misstated, the insurer pays a prorated death benefit based on what premiums would have been had the correct age been stated.
- Loans taken against a life insurance policy's cash value are not taxable income.
Policy Dividends and Options
- A common invalid policy dividend option is to accumulate without interest.
- A 20-Pay Life policy with a paid-up dividend option can be fully paid up early using dividends.
- Nonforfeiture Options include selecting extended term insurance for whole life policies.
Provisions and Riders
- The Double Indemnity Provision applies in cases where death is caused by an accident, leading to increased benefits.
- The automatic premium loan provision allows an insurer to use cash value to cover unpaid premiums.
- Collateral Assignment enables temporary transfer of policy ownership.
Reinstatement and Nonforfeiture
- Reinstating a lapsed policy requires the insured to provide evidence of insurability.
- Common nonforfeiture options do not include a Life Income Annuity.
- The Entire Contract provision mandates that the application be attached to the policy when issued.
Disability and Accelerated Benefits
- The Disability Income Rider provides monthly benefits to an insured who becomes totally and permanently disabled.
- An accelerated death benefit can be accessed if the insured is terminally ill, allowing cash payments against the death benefit.
Loans and Benefits
- A loan against a whole life policy decreases the net death benefit if not repaid.
- If an insured passes away during the grace period with unpaid premiums, the benefit payable will be the policy amount minus dues.
- The Payor Rider ensures premiums on a juvenile policy are paid until the child reaches a specific age.
Exclusions and Miscellaneous
- Standard exclusions in life insurance policies do not typically include disability.
- Accumulated interest from dividends is taxable.
- A double indemnity benefit is applicable when an insured dies instantly from an accident, ensuring extra protection for beneficiaries.
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Description
Test your knowledge with these flashcards covering key concepts from Chapter 2 of Life Provisions. Each card features essential terms and definitions that are critical for understanding life insurance policies. Perfect for review or self-assessment!
