Chapter 10

Question 1

A person designated to receive something, such as life insurance proceeds, from the insured

Answer 1

Beneficiary

Question 2

Life insurance that does not provide policy dividends; also called a nonpar policy

Answer 2

Nonparticipating policy

Question 3

Life insurance that provides policy dividends; also called a par policy

Answer 3

Participating policy

Question 4

Life insurance protection for a specified period of time; sometimes called temporary life insurance.

Answer 4

Term insurance

Question 5

An insurance plan in which the policyholder pays a specified premium each year for as long as they live; straight life policy, a cash-value life policy, or an ordinary life policy

Answer 5

Whole life insurance

Question 6

The amount received after giving up a life insurance policy

Answer 6

Cash value

Question 7

A whole life policy that combines term insurance and investment elements

Answer 7

Universal life Insurance

Question 8

A provision that allows the insured not to forfeit all accrued benefits

Answer 8

Nonforfeiture clause

Question 9

A document attached to a policy that modifies its coverage

Answer 9

Rider

Question 10

A benefit under which the company pays twice the face value of the policy if the insureds death results from an accident

Answer 10

Double indemnity

Question 11

A method of evaluating the cost of life insurance by taking into account the time value of money

Answer 11

Interest adjusted index