3.Terms.Life Policy Provisions, Options and Riders

Question 1

Activities of daily living (ADLs)

Answer 1

a person’s essential activities that include bathing, dressing,
eating, transferring, toileting, continence

Question 2

Assignment

Answer 2

transfer of rights of policy ownership

Question 3

Consideration

Answer 3

something of value that each party gives to the other (binding force in any
contract)

Question 4

Indemnity

Answer 4

a principle of reimbursement on which insurance is based; in the event of loss, an
insurer reimburses the insureds or beneficiaries for the loss

Question 5

Lump sum

Answer 5

payment of the entire benefit in one sum
Minor — a person under legal age

Question 6

NAIC

Answer 6

National Association of Insurance Commissioners, composed of insurance
Commissioners from all states and jurisdictions formed to resolve insurance regulatory issues

Question 7

Principal

Answer 7

the face value of the policy; the original amount invested before the earnings