Podcast
Questions and Answers
What could be the potential result of taking out a cash value loan under a life insurance policy?
What could be the potential result of taking out a cash value loan under a life insurance policy?
Reduces the amount receivable upon surrender of the contract
In what way is a life insurance policy affected by an accelerated benefit payment?
In what way is a life insurance policy affected by an accelerated benefit payment?
Decreases the death benefit
Which life insurance policy would be eligible to include an automatic premium loan provision?
Which life insurance policy would be eligible to include an automatic premium loan provision?
Whole life
A life insurance policy that includes a return of premium rider will pay the beneficiary how much upon the insured's death?
A life insurance policy that includes a return of premium rider will pay the beneficiary how much upon the insured's death?
Signup and view all the answers
Tim is confined to a nursing home but doesn't have a terminal illness. Which life insurance rider is designed to help pay for this type of expense?
Tim is confined to a nursing home but doesn't have a terminal illness. Which life insurance rider is designed to help pay for this type of expense?
Signup and view all the answers
A life insurance policy provision that has the ability to reduce the death benefit is called the?
A life insurance policy provision that has the ability to reduce the death benefit is called the?
Signup and view all the answers
Which of the following is true regarding a person receiving a waiver of premium benefit?
Which of the following is true regarding a person receiving a waiver of premium benefit?
Signup and view all the answers
Which of these statements regarding the extended term insurance nonforfeiture option in a life policy is accurate?
Which of these statements regarding the extended term insurance nonforfeiture option in a life policy is accurate?
Signup and view all the answers
How is the insured protected if a payor benefit rider is attached to the life insurance policy?
How is the insured protected if a payor benefit rider is attached to the life insurance policy?
Signup and view all the answers
The automatic premium loan provision can be accurately described as a?
The automatic premium loan provision can be accurately described as a?
Signup and view all the answers
What effect can a long-term care benefit rider have on a life insurance policy?
What effect can a long-term care benefit rider have on a life insurance policy?
Signup and view all the answers
What is payable to the policyowner if a whole life policy is surrendered prior to its maturity date?
What is payable to the policyowner if a whole life policy is surrendered prior to its maturity date?
Signup and view all the answers
Which of the following is NOT subject to the promise to pay in an insuring clause?
Which of the following is NOT subject to the promise to pay in an insuring clause?
Signup and view all the answers
A life insurance policy's waiver of premium rider has the ability to?
A life insurance policy's waiver of premium rider has the ability to?
Signup and view all the answers
An insured has a $25,000 whole life insurance policy with $6,000 cash value available. Under the extended term nonforfeiture option, what is the amount of insurance available to the insured?
An insured has a $25,000 whole life insurance policy with $6,000 cash value available. Under the extended term nonforfeiture option, what is the amount of insurance available to the insured?
Signup and view all the answers
How long can an insurer legally defer paying the cash value of a surrendered life insurance policy?
How long can an insurer legally defer paying the cash value of a surrendered life insurance policy?
Signup and view all the answers
Which of the following is NOT a condition that must be met for an accidental death benefit to be paid?
Which of the following is NOT a condition that must be met for an accidental death benefit to be paid?
Signup and view all the answers
Which of the following is NOT a dividend option for a life insurance policy?
Which of the following is NOT a dividend option for a life insurance policy?
Signup and view all the answers
Which of these would NOT be a valid reason to add the waiver of premium rider to a life insurance policy?
Which of these would NOT be a valid reason to add the waiver of premium rider to a life insurance policy?
Signup and view all the answers
Joe is a life insurance policyowner who has failed to pay interest on his policy loan. What will result from this nonpayment?
Joe is a life insurance policyowner who has failed to pay interest on his policy loan. What will result from this nonpayment?
Signup and view all the answers
Which statement regarding the waiver of premium rider is accurate?
Which statement regarding the waiver of premium rider is accurate?
Signup and view all the answers
In the event of premium default, which life insurance provision will use the cash value to keep the policy in force?
In the event of premium default, which life insurance provision will use the cash value to keep the policy in force?
Signup and view all the answers
Which benefit supplement added to a life insurance policy insures an entire family?
Which benefit supplement added to a life insurance policy insures an entire family?
Signup and view all the answers
Which of the following is NOT a true statement of the war exclusion?
Which of the following is NOT a true statement of the war exclusion?
Signup and view all the answers
A source of supplemental income for a life insurance policyowner can be derived from the?
A source of supplemental income for a life insurance policyowner can be derived from the?
Signup and view all the answers
Which life insurance clause prohibits an insurance company from questioning the validity of the contract after a stated period of time has passed?
Which life insurance clause prohibits an insurance company from questioning the validity of the contract after a stated period of time has passed?
Signup and view all the answers
Study Notes
Cash Value Loans and Death Benefits
- Taking out a cash value loan under a life insurance policy reduces the amount receivable upon surrender of the contract.
- An accelerated benefit payment decreases the death benefit of the policy.
Life Insurance Provisions
- Whole life policies can include an automatic premium loan provision.
- A life insurance policy including a return of premium rider pays the beneficiary total premiums paid plus the policy face amount upon the insured's death.
- The accelerated (living) benefit provision can reduce the death benefit.
Riders and Benefits
- A long-term care benefit rider assists in paying expenses for those confined to a nursing home, even without a terminal illness.
- A waiver of premium benefit requires the insured to be disabled for a certain period of time to be effective.
- Premium payments are waived with a payor benefit rider if the premium payor dies or becomes disabled.
Nonforfeiture Options and Cash Values
- Extended term insurance as a nonforfeiture option uses the policy's cash value to purchase coverage.
- If a whole life policy is surrendered early, the policyowner receives the cash value.
- An insurer can defer payment of the cash value from a surrendered life insurance policy for up to 6 months.
Exclusions and Conditions
- Receipt of an accidental death benefit is not contingent upon the cause of death being job-related.
- A dividend option does not allow for receiving the entire policy cash value.
Policy Loan and Premiums
- Failure to pay interest on a policy loan results in an increase of the loan amount to reflect due interest.
- The waiver of premium rider does not provide a direct cash payment to the policyowner.
Maintaining Policy Coverage
- The automatic premium loan provision can use cash value to keep the policy in force in cases of premium default.
- A family term rider extends insurance coverage to an entire family.
Other Provisions and Clauses
- The incontestable clause prevents an insurance company from disputing the validity of the contract after a specified time period.
- The war exclusion does not apply to civil insurrections.
Supplemental Income
- Supplemental income for a life insurance policyowner can be sourced from the cash value of the policy.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Test your knowledge on key concepts from NWM Chapter 4, Part 2. This quiz includes important terms and their definitions related to life insurance policies, including cash value loans and accelerated benefit payments. Perfect for reviewing essential information before exams.
