Life Insurance (glossary) Policy Provisions, Riders and Options

Question 1

__________ stipulate the rights and obligations of an insurance contract and are
fairly universal from one policy to the next

Answer 1

Provisions

Question 2

____________modify provisions that already

exist and are used to increase or decrease policy benefits and premiums.

Answer 2

Riders

Question 3

_________ offer insurers and insureds ways to invest or distribute a sum of money available
in a life policy

Answer 3

Options

Question 4

_____________ — a person’s essential activities that include bathing, dressing, eating,
transferring, toileting, continence

Answer 4

Activities of daily living (ADLs)

Question 5

___________ — transfer of rights of policy ownership

Answer 5

Assignment

Question 6

______________________— a beneficiary who has second claim to the policy proceeds after the death
of the insured (usually after the death of the primary beneficiary)

Answer 6

Contingent beneficiary

Question 7

____________, an organization composed of insurance commissioners from all 50 states

Answer 7

NAIC — National Association of Insurance Commissioners

Question 8

______________ — a beneficiary who has the first claim to the policy proceeds after the death of
the insured

Answer 8

Primary beneficiary

Question 9

_________ — the face value of the policy; the original amount invested before the earnings

Answer 9

Principal amount

Question 10

__________— an arrangement in which funds or property are held by a person or corporation for the
benefits of another person (trust beneficiary)

Answer 10

Trust