Chapter 5 & 6

Question 1

If a owner assigns one or some of the rights to another but not all, he or she has engaged in what?

Answer 1

collateral or conditional assignment

Question 2

Most conditional assignments involve the use of a assigner of a whole life cash policy as collateral for what?

Answer 2

secure a loan

Question 3

The assignee is only entitled to be reimbursed out of the policy proceeds for

Answer 3

the amount of the outstanding loan

Question 4

Except in the instances of fraud, the insure may challenge information supplied by the applicant on the application for up to two years

Answer 4

Incontestable Clause

Question 5

Premium must be paid to the insurer or its representative in order for coverage to provided.

Answer 5

Premium Paying Provision

Question 6

The period of time following the premium due date

Answer 6

Grace Period

Question 7

Protects the policy owner from a unintentional laps, usually 31 days

Answer 7

Grace Period

Question 8

If a policy lapse because premiums are not paid many contracts allow reinstatement along as its within 3 to 5 years.

Answer 8

Reinstatement provision

Question 9

Reinstatements will occur with in how many days

Answer 9

45 days

Question 10

Policy owner possess all rights contained in the policy

Answer 10

Owner rights provision

Question 11

To convey any or all their assignment rights to someone else

Answer 11

assignment

Question 12

absolute assignment

Answer 12

complete transfer

Question 13

A policy owner has how long to review the policy to deice if they want to keep it.

Answer 13

10 days

Question 14

Return the policy with giving the insurer a reason

Answer 14

Free look provision/right to examine

Question 15

Allows insures to deny a death claim if death is caused by a list of exclusions

Answer 15

Exclusion Provision

Question 16

When a death benefit is a attached to an employer no creditor can attach a lien on any kind to the proceeds

Answer 16

Spend Thrift Clause

Question 17

When planning to leave remaining proceeds to a minor

Answer 17

Trust

Question 18

distributions of equal amount are pad to the surviving children of the insured

Answer 18

per capita

Question 19

If no beneficiary is listed or alive or sated when the insured dies where does the proceeds go?

Answer 19

Paid to the insured estate

Question 20

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.

Answer 20

Facility of payment clause

Question 21

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

Answer 21

Entire Contract Clause

Question 22

Which of the following is true regarding an irrevocable beneficiary.

Answer 22

The beneficiary has the right to receive a copy of the policy

Question 23

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.

Answer 23

The estate of the deceased beneficiary

Question 24

Which of the following is protected by the common disaster clause

Answer 24

The contingent beneficiary

Question 25

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.

Answer 25

Proof of insurability will be required.

Question 26

The insured consideration for life insurance contract is

Answer 26

Premiums paid and statements maid on the application

Question 27

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?

Answer 27

The assignee receives its interest, with the remaining balance being paid to the beneficiary.

Question 28

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?

Answer 28

Incontestable provision

Question 29

What life insurance provision enables the policy owner to name or change beneficiary

Answer 29

ownership provision

Question 30

Which of the following would make sure that coverage continues an event of a premium lapse for more than the grace period

Answer 30

Automatic Premium loan provision

Question 31

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.

Answer 31

Fixed Period

Question 32

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.

Answer 32

Fixed Amount

Question 33

Face amount and the length of time for which payments will be made will determine the monthly income amount paid to the beneficiary

Answer 33

Fixed Period

Question 34

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.

Answer 34

Interest Only

Question 35

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.

Answer 35

Accelerated Benefits Rider

Question 36

When the insured is unable to perform at least two daily activity’.

Answer 36

Long Tern Care Rider ( Reduces total death benefit)

Question 37

What type of policy is a Payor rider added

Answer 37

Juvenile Insurance

Question 38

All the following can be considered a daily activity of living EXCEPT

Answer 38

Working

Question 39

When a paid up additions is dividend option is selected , what type of insurance is selected

Answer 39

Permeant Whole Life

Question 40

The waiver premium rider , when added to a life insurance policy would provide coverage in which of the following circumstances.

Answer 40

The insured suffers a total disability lasting eight months

Question 41

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

Answer 41

Guaranteed Insurability Rider

Question 42

Which of the following provides the least expensive form of life insurance

Answer 42

Accidental Death Protection

Question 43

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.

Answer 43

Dependent rider

Question 44

Is a business firm that purchases life insurance contract from its owner.

Answer 44

Viatical Settlement

Question 45

A life insurance company must respond to a request for verification of coverage from a viatical settlement provider with in how many days

Answer 45

30 days

Question 46

Viactical settlement disclosure provisions

Answer 46

information regarding the ill or policy owner; the sum received may be taxed; of 7 day look to change their mind

Question 47

The amount of coverage under this rider increases each year based on the cumulative total of premiums paid

Answer 47

Return of Premium

Question 48

allows cash value to paid an addition to face amount

Answer 48

Return of cash value

Question 49

Option is actually a form of single premium immediate straight life annuity

Answer 49

Life Income