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31 Cards in this Set
- Front
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1
An insured will be allowed to reactivate her lapsed life insurance policy if action is taken within a certain period of time, and proof of insurability is provided. Which policy provision allows this? |
A Grace period B Reinstatement provision C Waiver of premium provision D Incontestable clause |
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2
Abigail’s father dies leaving her the designated beneficiary on his life insurance policy. She is surprised to see that in addition to the face amount of the policy, she will also receive a refund of all of the premiums he had paid. Which rider is attached to the policy? |
A Return of premium B Cost of living C Decreasing term D Premature death |
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3
Which of the following situations would be addressed by The Uniform Simultaneous Death with a Common Disaster provision? |
A An insured and his child are injured in the same accident, and the uninjured, nonworking spouse wants to collect hardship benefits from the cash value of the life policy. B The insured and primary beneficiary are injured in the same car accident, and the beneficiary dies within 30 days of the insured. C Two beneficiaries of a life insurance policy are both killed in the same car accident. Because there are no remaining beneficiaries, the insured must select new ones. D Both the insured and beneficiary are severely injured and want to request advanced benefits to pay for hospitalization and subsequent medical treatment. |
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4
When a life insurance policy was issued, the policyowner designated a primary and a contingent beneficiary. Several years later, both the insured and the primary beneficiary died in the same car accident, and it was impossible to determine who died first. Which of the following would receive the death benefit? |
A The insured's estate B The primary beneficiary's estate C The insured's contingent beneficiary D The insurance company |
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5
An insured committed suicide one year after his life insurance policy was issued. The insurer will |
A Pay the policy’s cash value. B Pay the full death benefit to the beneficiary. C Pay nothing. D Refund the premiums paid |
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6
When a life insurance policy is cancelled and the insured has selected the extended term nonforfeiture option, the cash value will be used to purchase term insurance that has a face amount |
A In lesser amounts for the remaining policy term of age 100. B Equal to the cash value surrendered from the policy. C The same as the original policy minus the cash value. D Equal to the original policy for as long a period of time that the cash values will purchase |
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7
Because of financial obligations, John felt that he needed more insurance than the insurer was willing to issue. John's insurance producer told him that he could maximize the death benefit without increasing the face amount by the use of a(n) |
A Payor rider. B Waiver of premium rider. C Automatic premium loan rider. D Return of premium rider. |
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8
Which of the following riders would NOT cause the Death Benefit to increase? |
A Accidental Death Rider B Payor Benefit Rider C Guaranteed Insurability Rider D Cost of Living Rider |
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9
The paid-up addition option uses the dividend |
A To reduce the next year’s premium. B To accumulate additional savings for retirement. C To purchase a smaller amount of the same type of insurance as the original policy. D To purchase a one-year term insurance in the amount of the cash value. |
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10
The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the |
A Insuring clause. B Misstatement of Age clause. C Incontestability clause. D Reinstatement clause. |
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11
Which option provides a single beneficiary with income for the rest of his/her life? |
A Single Life Option B One Beneficiary Option C Joint Life Option D Single Beneficiary Option |
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12
Z falls from the roof of his house while fixing it and damages his spinal column enough to render him disabled for a year. His insurance policy carries a Disability Income Benefit rider. Which of the following benefits will Z receive? |
A Payments for life B Yearly premium waiver and income C Monthly premium waiver and monthly income D Percentage of medical costs paid by the insurer |
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13
Which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium? |
A Reinstatement B Reduce-paid up C Automatic premium loan D Extended term |
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14
Which of the following is true about the premium on the children’s rider in a life insurance policy? |
A It decreases when the oldest child reaches the age of 21. B It increases when a newborn baby is added to the policy. C It decreases when an adopted child is added to the policy. D It remains the same no matter how many children are added to the policy. |
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15
When may an insurance company use suicide as a defense against paying a death claim? |
A At no time B When death occurs within a specified period of time after the policy was issued C Only when there was a witness to the event D At any time suicide can be proven |
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1
An insured will be allowed to reactivate her lapsed life insurance policy if action is taken within a certain period of time, and proof of insurability is provided. Which policy provision allows this? |
B Reinstatement provision Incorrect! A lapsed policy may be reinstated within three years by paying back premiums, with interest, and proving insurability. |
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2
Abigail’s father dies leaving her the designated beneficiary on his life insurance policy. She is surprised to see that in addition to the face amount of the policy, she will also receive a refund of all of the premiums he had paid. Which rider is attached to the policy? |
A Return of premium
Incorrect! The Return of Premium Rider pays the beneficiary not only the face amount of the policy but also the amount that had been paid in premiums. The rider stipulates that death must occur prior to a certain age in order for the premium amount to be returned; hence, this particular rider has an expiration date. The Return of Premium Rider is funded by using increasing term insurance. |
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3 Which of the following situations would be addressed by The Uniform Simultaneous Death with a Common Disaster provision? |
B The insured and primary beneficiary are injured in the same car accident, and the beneficiary dies within 30 days of the insured. Correct! Incorrect! Most insurers specify a certain period of time, such as 30 or 60 days, in which death must occur in order to follow this provision. As long as the beneficiary dies within this specified period of time following the death of the insured, it will still be interpreted as if the beneficiary died first. |
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4 When a life insurance policy was issued, the policyowner designated a primary and a contingent beneficiary. Several years later, both the insured and the primary beneficiary died in the same car accident, and it was impossible to determine who died first. Which of the following would receive the death benefit? |
C The insured's contingent beneficiary Incorrect! Under the Uniform Simultaneous Death Law, the law will assume that the beneficiary dies first in a common disaster. This provides that the proceeds will be paid to the contingent beneficiary or to the insured's estate if none is designated. |
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5 An insured committed suicide one year after his life insurance policy was issued. The insurer will |
D Refund the premiums paid. Incorrect! If the insured commits suicide within 2 years following the policy effective date, the insurer's liability is limited to a refund of premium. |
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6 When a life insurance policy is cancelled and the insured has selected the extended term nonforfeiture option, the cash value will be used to purchase term insurance that has a face amount |
D Equal to the original policy for as long a period of time that the cash values will purchase.
Correct! Incorrect! With this option, the cash value is used as a single premium to purchase the SAME face amount as the original policy for as long a period of time as the cash will buy at the insured's current age. |
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7 Because of financial obligations, John felt that he needed more insurance than the insurer was willing to issue. John's insurance producer told him that he could maximize the death benefit without increasing the face amount by the use of a(n) |
D Return of premium rider.Correct! Incorrect! With the "return of premium" rider attached to the policy, upon the insured's death, the benefit paid will be the face amount plus an amount equal to all the premiums paid on the contract.
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8 Which of the following riders would NOT cause the Death Benefit to increase? |
B Payor Benefit Rider Correct! Incorrect! Payor Benefit Rider does not increase the Death Benefit; it only pays the premium if the payor is disabled or dies. With Guaranteed Insurability Rider, the policyowner can increase DB at specified ages or events, i.e. marriage or birth of a child; Cost of Living Rider increases DB to keep pace with inflation; in Accidental Death Rider, if the insured dies from an accident, DB is a multiple of the Face Amount. |
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9 The paid-up addition option uses the dividend |
C To purchase a smaller amount of the same type of insurance as the original policy. Incorrect! The dividends are used to purchase a single premium policy in addition to the face amount of the permanent policy. |
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10 The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the |
C Incontestability clause. Incorrect! If an insurer wishes to contest any statements on an application, they must do so within the first two years. |
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11 Which option provides a single beneficiary with income for the rest of his/her life? |
A Single Life Option Incorrect! The Single Life Option provides a single beneficiary with income for the rest of his/her life. |
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12 Z falls from the roof of his house while fixing it and damages his spinal column enough to render him disabled for a year. His insurance policy carries a Disability Income Benefit rider. Which of the following benefits will Z receive? |
C Monthly premium waiver and monthly income Correct! Incorrect! The Disability Income Benefit rider waives the policy premiums, just like the Waiver of Premium rider. Unlike the Waiver of Premium rider, it also allows the insured to receive a weekly or monthly income during the disability period. |
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13 Which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium? |
C Automatic premium loan Incorrect! Automatic premium loan provision is not required, but is commonly added to contracts with a cash value at no additional charge. This is a special type of loan that prevents the unintentional lapse of a policy due to nonpayment of the premium. |
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14 Which of the following is true about the premium on the children’s rider in a life insurance policy? |
D It remains the same no matter how many children are added to the policy.Correct! Incorrect! The premium does not change on the inclusion of additional children; it is based on an average number of children.
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15 When may an insurance company use suicide as a defense against paying a death claim? |
C When death occurs within a specified period of time after the policy was issued Correct! Incorrect! An insurance company can deny a claim if the death of the insured was by suicide and occurred within a time specified in the policy. |
