Ch4

Front 1

A ___ Option dictates a mode of payment to a beneficiary (e.g. Fixed Amount, Fixed Period, Life Income, etc.) The owner may choose Settlement Option for a beneficiary that may not be changed by the beneficiary.

Back 1

Settlement

Front 2

___ charges provide a means for the insurer to recapture their upfront expenses involved in issuing the policy.

Back 2

Surrender

Front 3

___, payments are made for the lifetime of the recipient. Upon death, if a recipient has not received an amount equal to the total death benefit, the balance is refunded to the beneficiary, either in a lump sum (cash refund), or in installments (installment refund).

Back 3

Life Refund

Front 4

*Z elects the life refund settlement option for a $250,000 death benefit. Z lives long enough to recover $150,000 of the $250,000 death benefit. How much does his beneficiary receive?

Back 4

$100,000

Front 5

___ represent a 'refund of unused premiums' when mutual insurers have a surplus (profit). ___ are not guaranteed.

Back 5

Dividends

Front 6

___ accumulates as the policyowner pays premium over the years.

Back 6

Cash value

Front 7

The ___ value must be stated in the contract if the owner wishes to cancel the policy, and Extended Term is a Nonforfeiture option that must be offered.

Back 7

cash surrender

Front 8

___ Term is a Nonforfeiture option that must be offered.

Back 8

Extended

Front 9

Since there were no other beneficiaries named, the death benefit would default to the ___. The probate court would distribute the proceeds according to law.

Back 9

insured's estate

Front 10

The entire contract consists of the

Back 10

policy, riders, amendments, and a copy of the application.

Nothing can be incorporated by reference.

Front 11

One-Year Term and Paid-Up Additions are dividend options, not ___

Back 11

nonforfeiture options

Front 12

Dividends are declared under ___ policies, are paid as declared, and are not guaranteed. The dividends are a return of excess premiums paid.

Back 12

participating

Front 13

receive dividends if the policy is which of the following?

Back 13

Participating

Front 14

The ___ gives the insurer the right to borrow sufficient funds from the cash value to prevent a policy lapse.

Back 14

Automatic Premium Loan Provision (APL)

Front 15

The ____________ provision prevents a Whole Life Policy from lapsing, as long as there is adequate cash value, if the insured/policyowner forgets to pay the premium by the end of the grace period.

Back 15

Automatic Premium Loan

Front 16

Some traditional whole life policies offer a(n) __________ feature to keep the policy in force if there are sufficient cash values to do so.

Back 16

Automatic premium loan

Front 17

Nonforfeiture values go into effect after

Back 17

a policy lapses.

Front 18

The automatic premium loan will keep a policy from lapsing. It is not a nonforfeiture values because Nonforfeiture values go into effect after __

Back 18

a policy lapses.

Front 19

Settlement Options ___ taxed to the beneficiary

Back 19

Only the interest would be not the principal

Front 20

___ are used when the owner wants to convert a lump sum death benefit to an income stream for the beneficiary

Back 20

Settlement Options

Front 21

A partial withdrawal is considered a

Back 21

partial surrender of the policy.

Front 22

The two types of assignment are

Back 22

Collateral (temporary), and Absolute (permanent).

Front 23

As the policyowner, Sylvia is free to change a revocable beneficiary at any time. She may also name a (best friend) new beneficiary if an irrevocable beneficiary dies before the insured. A beneficiary is not required to have

Back 23

an insurable interest in the insured.

Front 24

The ___ automatically becomes effective at the end of the grace period to prevent the policy from lapsing. There is no charge for having this provision in a cash value policy.

Back 24

Automatic Premium Loan provision

Front 25

Automatic Premium Loan Provision (APL)?

Back 25

Treated like any other policy loanOnly available on cash value policies. No charge for having this provision.Provision automatically becomes effective at the end of the grace period to prevent the policy from lapsing.

Front 26

Contractual provisions explain

Back 26

what the contract consists of what duties & responsibilities the parties to the contract have,

how the policy works &

basically spell out the agreement between the policyowner & the insurance company

Front 27

The ___ clause is the insurance company's promise to pay the policy's death benefit to the named beneficiary, after receiving due proof of death of the insured, as long as the policy is in force.

Back 27

insuring

Front 28

The common disaster clause assumes the __ if both are killed in the same accident

Back 28

primary beneficiary died before the insured

Front 29

Extended term is a

Back 29

nonforfeiture option

Front 30

A ____ is one which would have caused the insurer to not issue the policy had it been known.

Back 30

material misstatement

Front 31

Fixed Amount Settlement Option.

Back 31

The owner specifies the amount of each periodic payment and the insurer pays that amount until the funds plus interest are depleted

Front 32

Only ___ can provide for missed premium payments to be paid with the policy's cash value through an automatic premium loan.

Back 32

cash value policies

Front 33

An insured forgets to pay his insurance premium. Instead of the policy lapsing, the premium is paid by the company. This would suggest that a __________ policy was purchased.

Back 33

Whole Life

Front 34

Policies on a ___ platform allow for partial withdrawals.

Back 34

universal life

Front 35

No assignment of the policy will be binding on the insurer unless it is ____ The insurer is not responsible for determining the validity of the assignment.

Back 35

in writing and received at the insurer's home office

Front 36

___ not considered material to the policy issuance.

Back 36

Age and/or gender are

Front 37

Failing to repay a loan or loan interest will not void a policy until

Back 37

the total amount due becomes greater than the policy's cash value.

Front 38

The __ clause states what each party exchanges in the contract.

Back 38

consideration

Front 39

Frank has a life insurance policy in which he chooses to have the dividends increase the death benefit. Which Dividend Option did he select?

Back 39

Paid-Up Additions

Front 40

___ purchases single premium additional permanent benefits at the insured's attained age. The additional insurance is added to the face amount & it generates cash values & dividends as if the paid-up additional benefit was part of the original policy.

Back 40

Paid-Up Additions

Front 41

Upon non-payment of premium due, the extended term option kicks in automatically and is paid for by the ___ of the policy. The policy has nonforfeiture values which are available to the policyowner.

Back 41

cash values

Front 42

The ____ Option uses the present cash value of the policy, upon its lapse, to automatically buy a single premium term policy of the same face amount for a specified number of years and days as listed in the policy's nonforfeiture table.

Back 42

Extended Term

Front 43

Under the law, an ___ is a transfer of a right to another person or entity of rights by the owner of such rights.

Back 43

assignment