Questions and Answers
All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT...
Which situation accurately describes a reduced paid-up nonforfeiture option?
Policy has a decreased face amount
A life insurance policyowner does NOT have the right to...
Revoke an absolute assignment
Which of these is considered to be a Living Benefit option in a life insurance policy?
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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?
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What is an insurer required to do when faced with an error made under the Misstatement of Age provision?
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Loans obtained by a policyowner against the cash value of a life insurance policy...
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A whole life policy option where extended term insurance is selected is called a...
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Which of these is NOT a characteristic of the Accelerated Death Benefit option?
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All of these are valid policy dividend options for a life insurance policyowner EXCEPT...
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Kurt is an active duty serviceman who was recently killed in an accident while home on leave. Which military service exclusion clause would pay upon his death?
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James is the insured on a life insurance policy where his age was misstated on the application. Which of the following is CORRECT regarding the death benefit amount?
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A provision that allows a policyowner to temporarily give up ownership rights to secure a loan is called a...
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Pat owns a 20-pay life policy with a paid-up dividend option. Which of the following statements is true?
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An endorsement found in an insurance plan which modifies the provisions of the policy is called a...
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Ownership of a life insurance policy may be temporarily transferred with a...
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Which dividend option would an insurer invest the policyowner's money and add any interest earnings as the dividends accrue?
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All of the following riders can increase the death benefit amount EXCEPT...
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In what part of an insurance policy are policy benefits found?
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A waiver of premium rider allows an insured to waive premium payments if the insured is...
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Study Notes
Nonforfeiture Options
- Nonforfeiture options are available for policyowners, which include various benefits except reduction of premium.
- A reduced paid-up nonforfeiture option results in a policy with a decreased face amount.
- Nonforfeiture options include whole life policies that provide extended term insurance.
Living Benefits
- Accelerated death benefit is a living benefit option that allows policyholders to receive part of the death benefit before death.
Contract Provisions
- The entire contract provision requires that a copy of the application be attached to the policy upon issuance.
- In situations where there is a misstatement of age, insurers must pay age-corrected benefits.
Policy Loans and Tax Implications
- Loans against the cash value of a life insurance policy are not considered taxable income for the policyowner.
Dividend Options
- Valid policy dividend options include accumulating dividends, but not accumulating without interest.
- The accumulation at interest option allows insurers to invest the policyowner's money and grow dividends through interest.
Military Service Exclusions
- Payable exclusions upon the death of a serviceman like Kurt fall under "results" clauses pertaining to accidents.
Death Benefit Amounts
- If an insured’s age is misstated, the death benefit paid will equate to what the premium would have purchased if correctly stated.
Assignment Provisions
- Collateral assignment provisions allow temporary transfer of ownership rights to secure a loan.
- Ownership of life insurance can be temporarily transferred via collateral assignment.
Riders and Endorsements
- A rider modifies the policy provisions and may provide additional benefits, such as a waiver of premium.
- Waiver of premium riders allows individuals to skip premium payments if they become completely and permanently disabled.
Insurance Policy Benefits
- Policy benefits are detailed in the declarations part of an insurance policy.
- Certain riders increase death benefits, while the waiver of premium does not contribute to this increase.
Summary of Specific Scenarios
- Policyowners with a 20-pay life policy have the opportunity to use dividends to pay off the policy early.
Studying That Suits You
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Description
Test your knowledge on nonforfeiture options and life insurance rights with these flashcards from XCEL Chapter 4 Part 2. Each card presents a concept or question related to policyowner rights and options in life insurance. Perfect for reinforcing your understanding of these important terms.
