10.1e

Question 1

Two types of assignments available to an assignor are an ‘absolute’ or ‘collateral’ assignment. In an Absolute Assignment, the assignee ______ . This approach prohibits the assignor from any further control after such transfer.

In a Collateral Assignment, the policyowner assigns his or her policy to a ______. This approach is often taken in the event that the policyowner or insured dies. The debt owed to the creditor can be paid from the policy’s death benefit proceeds. Any death benefit proceeds remaining after the creditor’s debt is paid are then paid out to the policy’s beneficiary.

Answer 1

gains full control of the policy and acquires all rights of the policy upon transfer

creditor as collateral for a debt

Question 2

In the event that a misstatement of age or sex occurs on the application for life insurance, the insurer will adjust the amount of future premiums and request payment of the additional premium that the policyowner should have paid. If a misstatement of age or sex is found by the insurer upon the insured’s death, the death benefit will be adjusted to ______.

Answer 2

reflect premiums paid corresponding with the correct age or sex of the insured.

Question 3

In the event that a premium is not paid after the policy’s grace period has ended, the Automatic Premium Loan provision will ______ in order to prevent the policy from lapsing.

Answer 3

automatically take the required premium amount from the policy’s cash value