Chapter 4 Life Policy Provisions and Options

Question 1

Specifies that the policy, riders, or endorsements, amendments and a copy of the application make up the entire contract

Answer 1

Entire Contract Clause

Question 2

Insurer promise to pay the benefits in the event of a death of the insured while the policy is in force. Usually found on the front page

Answer 2

Insuring Clause

Question 3

Gives the policyowner a limited period of time (10 days) to decide whether to keep the policy or not. Premiums will be returned during the free look period

Answer 3

Free Look Provision

Question 4

Specifies the amount and frequency of premium payment the owner must pay to keep the policy in force

Answer 4

Consideration Clause

Question 5

Transfer of ownership

Answer 5

Assignment

Question 6

The policyowner may assign ownership to any person after notifying the insurance company. This is a permanent assignment
IE: Parent assigns policy to child when they turn specified age

Answer 6

Absolute Assignment

Question 7

The policyowner may offer a portion or all of the policy proceeds to a third-party as collateral for a debt. This is a temporary assignment until the debt is paid off

Answer 7

Collateral Assignment