Podcast
Questions and Answers
The entire contract typically consists of all of the following, except:
The entire contract typically consists of all of the following, except:
A settlement option that guarantees a payment for a specified period of time and that liquidates both principal and interest is which of the following?
A settlement option that guarantees a payment for a specified period of time and that liquidates both principal and interest is which of the following?
What allows the owner to name the beneficiary, choose a dividend option or settlement option, or borrow against the contract?
What allows the owner to name the beneficiary, choose a dividend option or settlement option, or borrow against the contract?
Ownership Provision
If an insured commits suicide within the time specified by the suicide clause, the insurance company may do all of the following, except:
If an insured commits suicide within the time specified by the suicide clause, the insurance company may do all of the following, except:
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Most often, life policies pay death claims in a single lump sum. The options that allow benefits to be paid other than lump sum are called:
Most often, life policies pay death claims in a single lump sum. The options that allow benefits to be paid other than lump sum are called:
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Tom elects the Life Income with a 10-year Period Certain settlement option. Tom dies in year 6. The beneficiary receives payments for:
Tom elects the Life Income with a 10-year Period Certain settlement option. Tom dies in year 6. The beneficiary receives payments for:
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Dividends if declared are paid:
Dividends if declared are paid:
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What is the easiest and best way to assure that the life insurance policy's death proceeds don't end up in probate court process?
What is the easiest and best way to assure that the life insurance policy's death proceeds don't end up in probate court process?
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George has named each of his three sons as per capita primary beneficiaries of a $30,000 life insurance policy. If all three sons are living at the time of George's death, which statement best describes the amount each will receive?
George has named each of his three sons as per capita primary beneficiaries of a $30,000 life insurance policy. If all three sons are living at the time of George's death, which statement best describes the amount each will receive?
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A partial withdrawal is considered:
A partial withdrawal is considered:
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Which of the following beneficiary designations prevents a policyholder from assigning the policy, taking a policy loan, or surrendering the policy without the beneficiary's consent?
Which of the following beneficiary designations prevents a policyholder from assigning the policy, taking a policy loan, or surrendering the policy without the beneficiary's consent?
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The remaining proceeds of the insurance policy will be paid to:
The remaining proceeds of the insurance policy will be paid to:
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The interest earned on dividends is:
The interest earned on dividends is:
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Which of the following two documents always constitutes part of the entire contract?
Which of the following two documents always constitutes part of the entire contract?
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All of the following can determine the death benefit settlement option, except:
All of the following can determine the death benefit settlement option, except:
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As a general rule, most insurance companies will allow the insured to change to another type of insurance policy without a medical examination if the:
As a general rule, most insurance companies will allow the insured to change to another type of insurance policy without a medical examination if the:
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All of the following are life insurance policy prohibited provisions, except:
All of the following are life insurance policy prohibited provisions, except:
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Generally, an insurer may defer the granting of a policy loan for up to:
Generally, an insurer may defer the granting of a policy loan for up to:
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An insured allows a permanent policy to lapse. Unless otherwise instructed, the insurance company:
An insured allows a permanent policy to lapse. Unless otherwise instructed, the insurance company:
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Each of the following is a source of life insurance policy dividends, except:
Each of the following is a source of life insurance policy dividends, except:
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The name of the beneficiary designation that will pay a deceased beneficiary's share to the heirs of that beneficiary who predeceases the insured is called:
The name of the beneficiary designation that will pay a deceased beneficiary's share to the heirs of that beneficiary who predeceases the insured is called:
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If the premiums are not paid on a Traditional Whole Life policy that has been in force for decades with no loan outstanding, what happens?
If the premiums are not paid on a Traditional Whole Life policy that has been in force for decades with no loan outstanding, what happens?
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John is the insured. His wife Mary is the primary beneficiary. Their three children are the contingent beneficiaries. John and Mary are killed in a common accident. The proceeds of John's policy would be paid to:
John is the insured. His wife Mary is the primary beneficiary. Their three children are the contingent beneficiaries. John and Mary are killed in a common accident. The proceeds of John's policy would be paid to:
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What provision establishes that if both the insured and the primary beneficiary die in the same accident, and it cannot be determined who died first, the insured will be presumed to have survived the beneficiary?
What provision establishes that if both the insured and the primary beneficiary die in the same accident, and it cannot be determined who died first, the insured will be presumed to have survived the beneficiary?
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Z is the beneficiary of a life insurance policy. Rather than take a lump sum, Z wanted a lifetime payout. However, Z would feel bad if after he died, residual values were retained by the insurer rather than being paid out. Z should consider which of the following settlement options?
Z is the beneficiary of a life insurance policy. Rather than take a lump sum, Z wanted a lifetime payout. However, Z would feel bad if after he died, residual values were retained by the insurer rather than being paid out. Z should consider which of the following settlement options?
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What allows the owner to name the beneficiary, choose a dividend option or settlement option, or borrow against the contract?
What allows the owner to name the beneficiary, choose a dividend option or settlement option, or borrow against the contract?
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The factors that determine the amount of each payment under the fixed period settlement option are:
The factors that determine the amount of each payment under the fixed period settlement option are:
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If an insured commits suicide within the time specified by the suicide clause, the insurance company may do all of the following, except:
If an insured commits suicide within the time specified by the suicide clause, the insurance company may do all of the following, except:
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Which of the following correctly describes the effect of the Common Disaster Clause?
Which of the following correctly describes the effect of the Common Disaster Clause?
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The provision that limits the amount of time an insurer has to challenge a claim and void the contract upon proof of a material misstatement is called the ____________ clause.
The provision that limits the amount of time an insurer has to challenge a claim and void the contract upon proof of a material misstatement is called the ____________ clause.
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Study Notes
Contract and Policy Components
- The entire insurance contract includes any riders, a copy of the application, and the policy itself.
- A copy of the cancelled check and receipt is not typically included.
Settlement Options
- Fixed Period settlement option liquidates both principal and interest for a specified time.
- Life Income with a 10-year Period Certain option ensures payouts continue for the designated time even if the insured dies early.
Ownership and Beneficiary Provisions
- Ownership Provision allows the policy owner to name beneficiaries and choose options related to dividends and borrowing.
- Irrevocable beneficiary designations restrict policy owners from making changes without beneficiary consent.
Suicide Clause
- Insurers have the right to refuse any death benefit, void the policy, or refund only the premium paid if the insured commits suicide within the specified timeframe.
Payment Options
- Life insurance policies generally pay death claims as a single lump sum, but Settlement Options allow for alternative arrangements.
- Dividends, if declared, are paid annually.
Beneficiary Designations and Claims
- Naming primary and contingent beneficiaries effectively avoids probate court for insurance proceeds.
- Per capita designations distribute equal shares among named beneficiaries, while per stirpes ensures deceased beneficiaries' shares go to their heirs.
Policy Features and Provisions
- A partial withdrawal is classified as a partial surrender of the policy.
- Cash values from a lapsed policy are typically used to purchase an extended term unless otherwise instructed.
Insurer’s Rights and Limitations
- Insurers may defer policy loan granting for up to 6 months.
- Insurers cannot void policies for non-repayment of loans if the outstanding debt exceeds the policy's cash value.
Death Benefits and Contingency
- In the event of simultaneous deaths, the Common Disaster Clause assumes the insured survived the primary beneficiary, directing proceeds to contingent beneficiaries.
- The factors influencing fixed period settlement amounts include the length of the period, face amount, and interest rates.
Tax Implications
- The interest earned on dividends is taxable income.
- Guaranteed cash value accumulations are not considered a source of dividends for policies.
Miscellaneous Provisions
- Incontestability clauses limit the time frame for insurers to contest claims based on material misstatements.
Studying That Suits You
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Description
Test your knowledge on key concepts from Chapter 4 of the Life and Health course. These flashcards cover essential terms and definitions that are crucial for understanding insurance contracts and settlement options. Great for exam preparation!
