Brainscape's Knowledge GenomeTM

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


See full index

LAH Course > Life Insurance Policy Provisions > Flashcards

Life Insurance Policy Provisions Flashcards

1
Q

Is a grace period a required provision?

A

Yes

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

A woman listed as a man on an application will probably receive a ________ benefit at death.

A

higher

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

What percentage of premium must be returned to the policyowner if a policy is returned during the free-look period?

A

100% of the premiums paid

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

Who selects how often a policy premium is paid?

A

The policyowner

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

Which beneficiary designation means per family line or lineage?

A

The per stirpes beneficiary designation

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

Taking a cash value policy loan __________ create a taxable event

A

does not

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

__________ is the transfer of policy rights to another party.

A

Assignment

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

What is the most common life insurance policy exclusion?

A

War

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

Policy loan interest is due each year on the ________ anniversary date.

A

policy

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

List some examples of policyowner rights.

A

Name/change a beneficiary, select premium mode, receive dividends, take loans against the contract, and assign benefits

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

First-in-line beneficiaries are also known as _______, second-in-line as __________, and third-in-line as ________.

A

First-in-line beneficiaries are also known as PRIMARY, second-in-line as CONTINGENT, and third-in-line as TERTIARY.

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

Explain the Simultaneous Death Act (Common Disaster).

A

The assumption that the primary beneficiary died prior to the insured when both die in a common accident.

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

A grace period is designed to prevent the ________________ lapse of a policy.

A

unintentional

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

What right does the APL option provide to the insurer?

A

The right to borrow from the cash value to pay overdue premium

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

Is interest paid on a policy loan tax-deductible?

A

No

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

The maximum loan value is equal to the ____________ minus any projected __________.

A

The maximum loan value is equal to the CASH VALUE minus any projected INTEREST.

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

If no beneficiary is listed, policy benefits will be paid to the insured’s _________.

A

estate

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

What would a parent use to change ownership of a child’s policy?

A

An absolute assignment

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

What type of assignment is used to secure a loan?

A

A collateral assignment

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

What is another name for the transfer of ownership?

A

Assignment

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

Only an ________________ of an _______ is provided the authority to make or waive a policy provision.

A

Only an APPROVED of an INSURER is provided the authority to make or waive a policy provision.

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

A fixed interest rate of no more than ___% may be assessed on a policy loan.

A

8%

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

True or False: Everyone attempting to reinstate a policy within 3 years of its lapse date will be accepted.

A

False

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

Suicide is covered once the policy has been issued for ____ years.

A

2 years

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

Beginning on the policy delivery date, the free look provision must be provided for no less than ____ days.

A

10 days

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

Explain the concept of absolute assignment.

A

The transfer of all policy rights to another

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

What clause allows an insurer to pay a portion of the death benefit to an individual who paid for funeral expenses?

A

The Facility of Payment Clause

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

A _____________ is a trust listed in a person’s will.

A

testamentary

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

What is the APL option designed to prevent?

A

The unintentional lapse of a policy

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

Which provision allows an insurer to charge a service fee for the collection of premium?

A

The Payment of Premium provision

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

Which payment mode would be the least expensive over the course of a year?

A

The annual payment mode

32
Q

What clause is a summary of the entire contract and is usually found on the first or face page of the contract?

A

The Insuring clause

33
Q

True or False: Any immediate family member may take a loan out against a person’s insurance policy.

A

False. Only the policyowner has the right to take a loan out against a policy.

34
Q

When would the APL option be activated?

A

Following the expiration of the grace period

35
Q

What happens to a policy if the premium is not paid during the grace period?

A

It will lapse for nonpayment of premium.

36
Q

A _______ is usually established when benefits are payable to a minor.

A

A trust is usually established when benefits are payable to a minor.

37
Q

_____________________ is the transfer of some, but not all, policy rights to another party.

A

Collateral assignment

38
Q

What are the four common modes of premium payment?

A

Annual, semiannual, quarterly, and monthly

39
Q

True or False: A whole life to term conversion with the same company does not require evidence of insurability.

A

False.

Conversion from whole life to term will always require evidence of insurability.

40
Q

Name some common policy exclusions.

A

War, private aviation, suicide (first 2 years), dangerous hobbies or occupations, and criminal acts

41
Q

If an insured’s age is misstated, what will eventually happen to any future claim?

A

The benefit will be adjusted to reflect the misstated age.

42
Q

Understating age on a life application will mean a _______ death benefit will be paid.

A

lower

43
Q

What does per capita beneficiary depiction mean?

A

It means per person or per head

44
Q

Death by suicide is not covered during the first ___ years of policy issue.

A

2 years

45
Q

Which beneficiary depiction may not be changed without permission from the beneficiary?

A

An irrevocable beneficiary depiction

46
Q

The _________ war exclusion only excludes benefits if death is the direct result of battle.

A

results

47
Q

Any policy modifications must be endorsed by the _________ and __________ to the policy.

A

Any policy modifications must be endorsed by the INSURER and ATTACHED to the policy.

48
Q

List two examples of an owner’s right.

A

The right to change beneficiary or premium payment mode

49
Q

True or False: Beneficiary listings may be changed by the insurer using a change of beneficiary form.

A

False.

The policyowner, not the insurer, may change the beneficiary.

50
Q

nefit proceeds left to an insured’s estate will be decided by a _________ court.

A

probate

51
Q

Within a contract, where does an insurer make its promise to pay benefits?

A

In the Insuring Clause

52
Q

What is another name for the free-look provision?

A

The 10-Day Right to Examine

53
Q

How long is a grace period?

A

No less than 31 days

54
Q

Which type of policy type allows for cash value loans–term or whole life?

A

Whole life

55
Q

Which type of trust is created during the life of the insured?

A

An inter vivos trust

56
Q

True or False: The entire contract provision is a mandatory provision.

A

True

57
Q

dentify the acronym: APL

A

Automatic Premium Loan

58
Q

If death occurs with an outstanding policy loan, what is subtracted from the death benefit?

A

The remaining amount of the loan plus any accrued interest

59
Q

What two items constitute an applicant’s consideration?

A

Application information and initial premium

60
Q

Do beneficiaries have contractual rights to a contract?

A

No

61
Q

Does a beneficiary have any owner’s rights?

A

No

62
Q

Define the term consideration.

A

An exchange of values between two parties

63
Q

The transfer of all policy rights to another party is referred to as ___________________.

A

absolute assignment.

64
Q

What provision requires an adjustment in benefits if the insured’s age has been improperly recorded?

A

The Misstatement of Age provision

65
Q

When must the optional APL provision be selected?

A

At the time of application

66
Q

True or False: A term-to-term policy conversion with the same company does not require evidence of insurability.

A

True

67
Q

An insurer must respond to an applicant for reinstatement within ___ days of receiving the paperwork.

A

45 days

68
Q

Is an insured afforded coverage during the grace period?

A

Yes

69
Q

A policy is said to be _____________ after the contract has been issued for ___ or more years.

A

A policy is said to be INCONTESTABLE after the contract has been issued for 2 or more years.

70
Q

The minimum length of a free-look period is ____ days.

A

The minimum length of a free-look period is 10 days.

71
Q

How are monthly premiums generally paid?

A

Mark For Review71 of 75An electronic fund transfer through a person’s bank

72
Q

How long does an insurer have to contest the validity of a claim based on false application information?

A

For two years following the issuance of the policy

73
Q

What is the name for an insurer’s consideration to the applicant?

A

The warranty

74
Q

Would it be better to reinstate an existing policy or attempt to purchase a new policy?

A

Reinstate the original policy since premium is based on insured’s age at issuance and may result in lower premiums.

75
Q

To whom is the interest earned on assets retained by an insurer taxed?

A

To the beneficiary

LAH Course (12 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions