Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

XCEL Life, Accident, and Health Insurance FOR CALIFORNIA > LIFE INSURANCE POLICY OPTIONS AND BENEFIT RIDERS > Flashcards

LIFE INSURANCE POLICY OPTIONS AND BENEFIT RIDERS Flashcards

1
Q

what type of assignment is used when selling a policy to a VSP?

A

absolute assignment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Premium rates for aditional insurance purchased under the GI rider are based on insured’s ___ or ___ age.

A

attained or actual age

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

name the six dividend options

A

cash, reduce premiums, accumulate at interest, paid-up permanent additions, paid-up option, and one-year term

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

once the VSP buys a contract, it is responsible for future ____

A

premium payments

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

The sale of a policy to a VSP may affect a person’s eligibility for ____ assistance.

A

public assistance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What does the guaranteed insurability rider allow?

A

It allows additional coverage to be purchased without the insured having to prove they are insurable.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Who negotiates a VSP purchase?

A

A viatical settlement broker

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

which settlement option indicates the beneficiary is most concerted with receiving income for a specific period of time?

A

Fixed period

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What settlement option uses all or a portion of the death benefit to provide an income for life?

A

the life income option

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

dividends are considered a return of ____ premium, and are not _____ when return to policyowners.

A

overpaid premium, not taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

T or F: Interest earned on dividends left with the insurer to accumulate is not taxable

A

false

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

what is the limitation to an accidental death rider?

A

it only pays for accidental death

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

what dividend option provides the greatest additional amount of death benefit protection for a limited period?

A

the one-year term option

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

when a policy is sold to a VSP, who becomes the new policyowner?

A

the VSP is the new policyowner and beneficiary

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

if disabled, the waiver of premiums still allows for ___ growth

A

cash value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

what is the tax treatment upon policy surrender?

A

upon policy surrender, the cash value that exceeds total premiums paid would be considered taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

when does the settlement option become available to the beneficiary?

A

upon the death of the insured

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

what are the cash value options available to policyowners upon policy surrender?

A

non-forfeiture options

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

what is another name for the death benefit on a AD&D policy?

A

the principle sum or amount

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

dividends paid on life insurance policies are received ___ and are never ___

A

tax-free, never guaranteed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

what is the surrender for cash benefit?

A

a nonforfeiture option whereby the owner surrenders the policy for its cash value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

name the three nonforfeiture benefits

A

surrender for cash, extended level term, and reduced paid-up permanent insurance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

the payor rider is added to a ____ policy for an additional ____

A

the payor rider is added to a childs policy for an additional premium

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

requiring an additional premium, riders added to a life insurance policy must be purchased ____

A

at the time of application

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

if someone has any paid-up permanent additions, what is payable upon death?

A

the paid-up permanent additions, in addition to the death benefit on the original policy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

an accelerated benefit may provide for ___ if the insured is confined to a nursing home

A

long-term care

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

In a universal life insurance policy, what is the waiver of premium provision called?

A

the waiver of cost provision

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

upon disability, a life insurer may waive the premium obligation after ___ months of disability

A

6 months

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

describe the paid-up permanent insurance option

A

this option provides for a smaller permanent life insurance policy requiring no further premiums

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

what are the advantages of selling a contract to a VSP?

A

a larger living benefit and being free from federal taxes

31
Q

what is probably the simplest and most common settlement option used?

A

cash or lump-sum payment

32
Q

what is the result of a life settlement?

A

a policy owner sells his existing life insurance policy to a third party

33
Q

T or F: double or triple indemnity may be used to describe the AD&D death benefit

A

true

34
Q

T or F: in an insurer is to retain the death benefit, an interest rate will be paid on these assets.

A

true

35
Q

what is a stranger-originated life insurance policy? (STOLI)

A

a policy that is purchased by a third party with no insurable interest in the insured.

36
Q

Which settlement option indicates the beneficiary is most concerned with receiving a specific monthly dollar amount?

A

fixed amount

37
Q

what dividend option provides an additional benefit for a limited period of time?

A

the one-year term option

38
Q

settlement options may be selected by ___ but altered by a ___ upon death of the ____

A

selected by the policyowners, altered by a beneficiary upon the death of the insured.

39
Q

what rider increases the death benefit to offset an increase in the CPI?

A

the cost of living adjustment (COLA) rider

40
Q

in a life settlement, which party remains the same after the actual transfer of ownership occurs?

A

the insured party remains the same

41
Q

what additional rider increases the life insurance death benefit by an amount equal to the total policy premiums paid?

A

the return of premium rider

42
Q

what is another name of the accelerated benefits rider?

A

the living needs rider

43
Q

if a person is disabled, life insurance premiums are waived once the insured is totally disabled for ___ months.

A

6 months

44
Q

accelerated benefits often require the insured to be ____ with a life expectancy of ___ to ___ months

A

terminally ill, 12 to 24 months

45
Q

T or F: A portion of the benefit provided by either fixed amount or fixed period will be taxable interest.

A

true

46
Q

benefits received through the accelerated benefits rider will ____ the future death benefit.

A

reduce

47
Q

is the waiver of premium rider optional or mandatory?

A

optional. the waiver of premium rider must be added at the time of application by paying an additional premium.

48
Q

someone who has a very short life expectancy can expect a larger or smaller purchase price when selling to a VSP?

A

larger

49
Q

T or F: a time limit exists to purchase additional life protection without required evidence of insurability

A

true - the guaranteed insurability (GI) rider usually limits this to age 40 or 50

50
Q

which settlement option allows interest to be paid on all the retained death benefit?

A

the interest only option

51
Q

what rider uses an increasing term policy rider to pay an additional DB equal to the base policy’s existing cash value?

A

the return of cash value rider

52
Q

what is the name of the individual who sells her policy to a VSP?

A

a viator

53
Q

Are death benefits taxable when received by the beneficiary?

A

no, death benefits are not taxable

54
Q

if ___ the proceeds received from a VSP sale are received tax-free

A

terminally ill

55
Q

what nonforfeiture option continues to provide an identical death benefit upon policy surrender?

A

the extended leven term option

56
Q

which option is more flexible– fixed period or fixed amount?

A

fixed amount

57
Q

what nonforfeiture option continues to provide permanent insurance protection in a smaller face amount?

A

the paid-up permanent insurance option

58
Q

the dividend option is used to gradually increase the overall death benefit as a possible inflation offset

A

the paid-up permanent additions option

59
Q

identify the acronym: AD

A

accidental death & Dismemberment

60
Q

a family term rider is added to a policy issued to the family ____

A

breadwinner

61
Q

Insurance policy dividends are received ___, while interest earned on dividends is ______

A

tax-free, taxable

62
Q

what rider is added to a policy and will provide a term insurance death benefit on the spouse or children?

A

a dependent rider

63
Q

what type of insurance is used to provide dependent coverage using a family term rider?

A

level term insurance

64
Q

identify the acronym: VSP

A

viatical settlement provider

65
Q

dividends are paid to policyholders of a ___ company

A

mutual

66
Q

the AD&D rider is generally ____ because it only protects against _____

A

inexpensive, accidental losses

67
Q

policies sold to a VSP are said to have gone through _____

A

viatication

68
Q

if the premium payor dies, premiums on a child’s policy may be waived until the child reaches age ___

A

21

69
Q

what is the name of the company that purchases existing life insurance policies from an existing policyowner?

A

viatical settlement provider

70
Q

what a nonforfeiture option continues to provide an identical amount of insurance protection for a limited period?

A

the extended level term option

71
Q

for the principal benefit to be paid under an AD&D policy, death must occur within ____ days following the accident.

A

90 days

72
Q

benefits received form an accelerated benefit are not taxable if the insured is ____

A

terminally ill

73
Q

T or F: Waiver means a voluntary abandonment of an existing right

A

true

74
Q

what name is synonymous for the waiver of premium rider in a UL policy?

A

cost of insurance rider

XCEL Life, Accident, and Health Insurance FOR CALIFORNIA (19 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions