Hs 311 Insurance, Ch 9--T/f

Front 1

All beneficiaries of a life insurance policy are identified in the policy declarations page.

Back 1

True

Front 2

Standard policy provision laws require that life insurance policies include certain provisions that are worded precisely as contained in the statute.

Back 2

False

False. Although certain provisions must be included, insurers can select the actual wording as long as it is at least as favorable to the policyowner as the statutory language.

Front 3

If the insured dies 2 weeks after the premium was due but not paid, the life insurance company must pay the beneficiary only an amount equal to the premiums paid in the past plus interest.

Back 3

False. If the insured dies 2 weeks after the premium was due but not paid, the policy remains in force under the grace period provision, and the life insurance company must pay the beneficiary an amount equal to the full death benefit (possibly minus 1 month's premium).

Front 4

If the insured dies or surrenders the policy while a loan is outstanding, the insurer deducts the loan and accrued interest from the amount otherwise payable.

Back 4

True

Front 5

After John's policy has been in force for 2 years during John's lifetime, the insurer can no longer contest the policy based on a false answer in the application about John's health.

Back 5

True

Front 6

The use of dividends to purchase paid-up additions may be advantageous because the purchase is made at rates that do not contain a loading for expenses.

Back 6

True

Front 7

If Bill dies 20 years after purchasing his whole life policy and the insurer discovers that he had understated his age in the application, the company will have to pay the face amount to the beneficiary because the 2-year contestability period is over.

Back 7

False. The company would lower the death benefit to the amount that the premium paid would have purchased at the correct age. The incontestable clause does not apply to a misstatement of age.

Front 8

If an application is attached to a life insurance contract, it becomes part of the contract.

Back 8

True

Front 9

If the premium for a whole life insurance policy is overdue at the end of the grace period, the policy will lapse and automatically pay the cash surrender value to the policyowner.

Back 9

False. If the premium for a whole life insurance policy is not paid by the end of the grace period, the policy will lapse and automatically go under a nonforfeiture option, usually extended term. The policyowner then has a period of time to decide to keep the policy under the automatic option, surrender it for its cash value, or switch to the paid-up whole life option.

Front 10

If Sarah named her husband as primary beneficiary and her children as contingent beneficiaries of her life insurance policy, and her husband predeceases her, the death proceeds from Sarah's policy will be paid to her husband's estate unless she has changed the beneficiary designation.

Back 10

False. The death proceeds from Sarah's policy will be paid to her children as contingent beneficiaries. Upon her husband's death, the right to receive the death proceeds from Sarah's policy transfers to the children as contingent beneficiaries.

Front 11

If Teresa commits suicide 5 years after purchasing her whole life policy, the insurer will pay the face amount to the beneficiary.

Back 11

True

Front 12

The person who has the power to exercise the rights in a life insurance policy is called the insured.

Back 12

False. This person is the policyowner.

Front 13

Although accidental death benefit riders typically exclude death by suicide, they do pay for most deaths caused by disease.

Back 13

False. Accidental death benefit riders do not pay for deaths caused by disease.

Front 14

If a person purchases a life insurance policy that the state insurance department has not approved, the policyowner can seek a refund of premiums paid or seek to enforce the policy.

Back 14

True