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10 Cards in this Set

  • Front
  • Back
Which provision of a life insurance policy states that the application is part of the contract?
A. Insuring agreement
B. Ownership
C. Entire contract
D. Assignment
A life insurance policy clause that prevetns an insurance company from denying payment of a death claim after a specified period of time is known as the
A. Misstatement of age clause
B. Incontestability clause
C. Reinstatement clause
D. Legal action
When a death claim is submitted, it is discovered that the insured understated her age on the application for a life policy. What action will the insurer take?
A. Deny the claim on material misrepresentation on the application.
B. Pay the face amount of the policy if the death occurred after the incontestable period.
C. Pay a reduced death benefit based on the insured's actual age.
D. Pay teh stated death benefit less the unpaid premium owed to the company as a result of the understated age.
Which of the following terms refers to the transfer of some or all of the ownership rights of a life insurance policy from one individual to another?
A. Nonforfeiture
B. Endorsement
C. Transfer of Value
D. Assignment
Which of the following is true about the mandatory free-look period in a life insurance policy?
A. It commences when the application is signed.
B. It applies only to term life insurance policies.
C. It can be waived by an insurer.
D. It commences when the policyy is delivered.
A spouse receives $5,000 a month until the principal and interest on her husband's life insurance policy have been paid out. Which settlement option did this beneficiary choose?
A. Life income
B. Fixed amount
C. Cash payment
D. Fixed period
Which of the following features allows an insurance policy to remain in force for a specific number of days beyond the premium due date?
A. Reinstatement provision
B. Nonforfeiture option
C. Grace period provision
D. Consideration clause
The insured pays $1,200 annually for her life insurance premium. This year, she has accumulated $175 worth of dividends, which she applies to her next premium, thus reducing it to $1,025. What divided option has the insured chosen?
A. Cash option
B. Reduced paid-up
C. Reduction of premium
D. Accumulation at interest
All the following are nonforfeiture options in life insurance policies EXCEPT
A. Automatic Premium Loans
B. Cash Surrender Value
C. Extended Term
D. Reduced Paid-Up Insurance
Which of the following statements are true of both the fixed-period and fixed-amount settlement options?
A. Both guarantee payments for the life of the beneficiary.
B. Both guarantee that the principal and interest will be fully paid out.
C. The amount of payments is based on the recipient's life expectancy.
D. The size of installments decreases after a certain period of time.