Don’t Knows Pt II Flashcards
Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary?
Life income
The incontestable clause allows an insurer to:
Contest a claim during the contestable period
How are surrender charges deducted in a life policy with a rear end loaded provision?
Deducted when the policy is discontinued
P is the insured on a participating life policy. Which statement is true if P’s premiums are waived due to a disability?
P will still receive declared dividends
What is the underlying concept regarding level premiums?
The early years are charged more than what is needed
How do life insurance companies handle cases where the insured commits suicide within the contract’s stated contestable period?
Claims are denied under the suicide clause of the policy
K owns a whole life policy. If K wants an increasing death benefit to protect against inflation, which dividend option, should she choose?
Paid-up additional insurance
The free look provision begins:
Upon receipt of the policy by the policy owner
The purpose of the ____________ period clause is to avoid an unintentional lapse of a life insurance policy.
Grace
The advantage of reinstating an original life policy is
The premiums are based on a younger age
Which of these are not an example of a non-forfeiture option?
Life income
The option that provides an additional death benefit for a limited amount of time at the lowest possible cost is called a(n):
AD&D rider
Which of these life insurance riders allows the applicant to have access coverage?
Term rider
What provision in a life insurance policy states that the application is considered part of the contract?
Entire contract provision
When does a guaranteed insurability rider allow the insured to buy additional coverage?
At future dates specified in the contract with no evidence of insurability required
Which statement regarding the misstatement of age provision is considered to be true?
Coverage will be adjusted to reflect the insured’s true age if a misstatement of age is discovered
Quarterly premium payments increase the annual cost of insurance because
Interest to the insurer is decreased while the administrative costs are increased
A policy loan is made possible by which of these life insurance policy features?
Cash value provision
A return of premium life insurance policy is:
Whole life and increasing term
Dividends paid for my life insurance policy are:
Issued by the insurer
Which of the following non-forfeiture options offers the highest death benefit?
Extended term
Which of these are not an example of a non-forfeiture option?
Life income
The automatic premium loan provision is designed to:
Avoid a policy lapse
Which of the following non-forfeiture options offers the highest death benefit?
Extended term
Which of the following is an example of a non-forfeiture option?
Reduced paid up option
T is given a receipt after completing a life insurance application and paying the initial premium. Under this situation, T’s coverage is:
Conditional, depending on the insurer’s underwriting guidelines
At what point does an informal agreement become a binding contract
When consideration is provided by one of the parties to the contract
In an insurance contract, the insurer is the only party who makes a legally enforceable promise. What kind of contract is this?
Unilateral
Insurance contracts are known as _____________ because certain future conditions or acts must occur before any claims can be paid
Conditional
Who elects the governing body of a mutual insurance company?
Policyholders
Which of these describe a participating insurance policy?
Policy owners are entitled to receive dividends
