Chapter 5 & 6 Flashcards
If a owner assigns one or some of the rights to another but not all, he or she has engaged in what?
collateral or conditional assignment
Most conditional assignments involve the use of a assigner of a whole life cash policy as collateral for what?
secure a loan
The assignee is only entitled to be reimbursed out of the policy proceeds for
the amount of the outstanding loan
Except in the instances of fraud, the insure may challenge information supplied by the applicant on the application for up to two years
Incontestable Clause
Premium must be paid to the insurer or its representative in order for coverage to provided.
Premium Paying Provision
The period of time following the premium due date
Grace Period
Protects the policy owner from a unintentional laps, usually 31 days
Grace Period
If a policy lapse because premiums are not paid many contracts allow reinstatement along as its within 3 to 5 years.
Reinstatement provision
Reinstatements will occur with in how many days
45 days
Policy owner possess all rights contained in the policy
Owner rights provision
To convey any or all their assignment rights to someone else
assignment
absolute assignment
complete transfer
A policy owner has how long to review the policy to deice if they want to keep it.
10 days
Return the policy with giving the insurer a reason
Free look provision/right to examine
Allows insures to deny a death claim if death is caused by a list of exclusions
Exclusion Provision
When a death benefit is a attached to an employer no creditor can attach a lien on any kind to the proceeds
Spend Thrift Clause
When planning to leave remaining proceeds to a minor
Trust
distributions of equal amount are pad to the surviving children of the insured
per capita
If no beneficiary is listed or alive or sated when the insured dies where does the proceeds go?
Paid to the insured estate
This provision states a insurer may select as beneficiary an individual who appears to be equitably entitled to apportion or all of the life insurance proceeds since he or she have incurred final medical and funeral expenses of the insured.
Facility of payment clause
Which of the following policy provisions prevent an insurer from denying a death claim in the future after the purchase of a life insurance policy
Entire Contract Clause
Which of the following is true regarding an irrevocable beneficiary.
The beneficiary has the right to receive a copy of the policy
The insured died and the death benefit is paid to the named beneficiary. The beneficiary dies three months later. There are three surviving children. Any remaining proceeds from the policy covering the insured would be paid to which of the following.
The estate of the deceased beneficiary
Which of the following is protected by the common disaster clause
The contingent beneficiary
If a policy owner wishes to convert a policy another type she is allowed to do so because of the conversion option. Which of the following will result if a policy is changed from whole life to term insurance.
Proof of insurability will be required.
The insured consideration for life insurance contract is
Premiums paid and statements maid on the application
A policy owner conditionally assigns the cash value of a whole life policy to to a lender to secure a loan. If the insured dies before the loan I paid off how will the death benefit be divided?
The assignee receives its interest, with the remaining balance being paid to the beneficiary.
What provisions allows the insurer to void contracts and return premiums if it is determined that during the initial two years the insure lied about his or her health?
Incontestable provision
What life insurance provision enables the policy owner to name or change beneficiary
ownership provision
Which of the following would make sure that coverage continues an event of a premium lapse for more than the grace period
Automatic Premium loan provision
Systematically liquating principal and interest over a period of years, with out references to life contingencies. The beneficiary leaves the death proceeds with the insurer. Interest is paid on the proceeds by the insurer monthly income is than paid to the beneficiary for a specific period of time.
Fixed Period
Option allows the death proceeds at interest with the insurer and to be paid out in installments for specified amounts for an indefinite amount of time until funds are exhausted.
Fixed Amount
Face amount and the length of time for which payments will be made will determine the monthly income amount paid to the beneficiary
Fixed Period
Proceeds remain with the insurer and only the interest is paid to the beneficiary. Provides the beneficiary with flexibility, frees him or up any investment worry, guaranteeing premium and minimal rate of return.
Interest Only
This rider allows the insured to accelerate the death benefit of a life insurance policy while living if a physicians diagnosis and verifies that the insured is suffering from a terminal illness.
Accelerated Benefits Rider
When the insured is unable to perform at least two daily activity’.
Long Tern Care Rider ( Reduces total death benefit)
What type of policy is a Payor rider added
Juvenile Insurance
All the following can be considered a daily activity of living EXCEPT
Working
When a paid up additions is dividend option is selected , what type of insurance is selected
Permeant Whole Life
The waiver premium rider , when added to a life insurance policy would provide coverage in which of the following circumstances.
The insured suffers a total disability lasting eight months
What type of rider can be added to a policy covering a child which will allow him or her to purchase additional amounts of life insurance in the future with out requiring medical examinations
Guaranteed Insurability Rider
Which of the following provides the least expensive form of life insurance
Accidental Death Protection
A life insurance producer sells a straight life policy with an accelerated benefits policy to a 55 year old man in excellent health. The producer also convinces the applicant to add an accelerated benefit rider and waiver of premium rider to the policy as well. What rider can be added to this policy to cover the applicant spouse if she dies in a accident.
Dependent rider
Is a business firm that purchases life insurance contract from its owner.
Viatical Settlement
A life insurance company must respond to a request for verification of coverage from a viatical settlement provider with in how many days
30 days
Viactical settlement disclosure provisions
information regarding the ill or policy owner; the sum received may be taxed; of 7 day look to change their mind
The amount of coverage under this rider increases each year based on the cumulative total of premiums paid
Return of Premium
allows cash value to paid an addition to face amount
Return of cash value
Option is actually a form of single premium immediate straight life annuity
Life Income
