10.1b

Question 1

Also written into all life contracts, the ______ specifies the premium amount and date on which payments must be received to maintain the life policy. A policyowner can pay on a monthly, quarterly, semi-annual, or annual basis.

Answer 1

consideration clause

Question 2

The most common option for paying life insurance policy premiums is by ______ on a monthly basis. Using this method of payment, an automatic withdrawal is made directly from the consumer’s checking or savings account and is withdrawn on a specified date, as prescribed in the policy.

Answer 2

‘automated bank draft’

Question 3

Although not as common, policy premiums can also be made by ______; however, most insurers include a service or handling fee, in addition to the premium amount.

Answer 3

mailing a personal check to the insurer

Question 4

The ______ specifies a period of time in which a policyowner has the right to review and reject his or her insurance policy if not completely satisfied with its coverage. Although it varies based on each states’ laws, this period extends 10-14 days from the date of receiving a new policy from the insurer.

Answer 4

Free Look provision

Question 5

If a policyowner fails to pay his or her life insurance policy’s premium by the date stated in the contract, the policy’s ______ will prevent the policy from lapsing. Typically, a life insurance policy grace period extends for either 30 or 31 days after the date in which the premium is normally due.

Answer 5

grace period