Policies, Provisions, Options And Riders Flashcards
What is the advantage of reinstating a life insurance policy as opposed to applying for a new one?
Policy premium in a reinstated policy will be set according to the insured’s original age.
What life policy rider allows the company to forgo collecting the premium of the insurered becomes disabled?
Wavier premium
What provisions is a life insurance policy extends coverage beyond the premium due date?
Grace period
Which of the two types of policy assignments require transfer of ALL OWNERSHIP rights in the policy to a third party?
Absolute assignment
Who does the common disaster clause protect?
The contingent beneficiary
What nonforfeiture option is automatically selected by the company if not chosen by the policy owner?
Extended term
With the reduction of premium dividend option, how is the dividend used?
The dividend is applied to the next year’s premium (it reduces the next year’s premium)
To meet the requirement of the entire contract policy provision, an insurance policy must contain what?
A copy of the original application
What are the most common exclusions in life insurance policies?
War and military service, hazardous occupations and aviation
What beneficiary designation had first claim to death process of a life insurance policy?
Primary beneficiary
What are the three nonforfeiture option in life insurance policies?
Cash surrender
Reduced paid-up
Extended term
A policy owner borrowed a portion of cash value from his whole life policy. I is not repaid, how will that affect the death benefits to the beneficiary?
It will be reduced by the amount of the loan.
What are policy dividends?
Return of unused premiums
If a settlement options is not chosen by a policy owner or beneficiary, what option will be used by the insurer?
Lump sum payment
What term is used to describe method of payment of the death benefit to beneficiaries upon the insured death?
Settlement options
What does the term double indemnity mean?
The insurer will pay a benefit of twice the face amount
When will the contingent beneficiary receive death benefits from a life insurance policy?
When the primary beneficiary dies before the insured
What dividend options is automatically selected by the company if not chosen by the policy owner?
Paid up additions
Under what non-forfeiture option does the company pay the policy surrendered value and have no further obligation to the policy owner?
Cash surrender
What type of assignment is used to secure the payment of a debt with an existing life insurance policy?
Collateral assignment
What happens to the proceeds of a life insurance policy if there is no name beneficiary?
The proceeds are paid to the insured’s estate
The sole beneficiary of life insurance policy dies before the insured if the policy owner does not amend the beneficiary designation what will happen to the policies, death benefits?
It will be paid to the insured estate
In the fixed period settlement option how will the number of installments for death benefits proceeds determine the amount of installments
The longer the period selected the smaller each installment will be
What happens to the policy’s cash value under an extended term non-forfeiture option?
The cash value is converted to the same face amount as the whole life policy
