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Life > Policy Provision > Flashcards

Policy Provision Flashcards

1
Q

The suicide clause of a life insurance policy states that if an insured commits suicide within a stated period from the policy’s inception, insurer will only be liable for a return of premiums paid

A

Minus indebtedness and without interest

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2
Q

All of these are valid policy dividend options for a life insurance policyowner EXCEPT

A

accumulate without interest

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3
Q

A life insurance policy normally contains a provision that restricts coverage in the event of death under all of following except

A

fare-paying passenger

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4
Q

Life insurance will normally pay for losses arising from ?

A

Commercial aviation

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5
Q

Barbara’s policy includes a rider which allows her to purchase additional insurance at specific dates or events without evidence of insurability. This rider is called a(n) ___?

A

Guaranteed insurability rider

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6
Q

Which situation accurately describes a reduced paid-up nonforfeiture option?

A

Policy has a decreased face amount

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7
Q

A life insurance policyowner does NOT have the right to ?

A

revoke an absolute assignment

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8
Q

The two major actions required for a policyholder to comply with Reinstatement Clause are ?

A

1) provide evidence of insurability, 2) pay past due premiums

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9
Q

A provision that allows a policyowner to temporarily give up ownership rights to secure a loan is called a(n) ____?

A

Collateral assignment

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10
Q

Which of these would limit a company’s liability to provide insurance coverage?

A

Exclusion

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11
Q

A provision in a whole life policy that allows a policyowner to terminate the policy in return for a reduced paid-up policy of the same type is called a(n) ___?

A

Nonforfeiture provision

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12
Q

Ron has a life insurance policy with a face value of $100,000 and a cost of living rider. If the consumer price index has gone up 4%, how much may Ron increase the face value of the policy?

A

$4,000

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13
Q

Matt is applying for life insurance and requests a double indemnity rider. A double indemnity benefit will be payable to Matt’s beneficiary if Matt ____

A

dies instantly from a car accident

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14
Q

The free-look provision gives the policyowner?

A

the right to return the policy for a full refund within a specified number of days

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15
Q

Pat owns a 20-pay life policy with a paid-up dividend option. Which of the following statements is true?

A

The policy may be paid up early by using policy dividends

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16
Q

All of the following riders can increase the death benefit amount EXCEPT?

A

Waiver of Premium

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17
Q

Which of these is considered to be a living benefit option in life insurance policy?

A

Accelerated death benefit

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18
Q

Which of the following is considered to be an alternative to a life sentence?

A

Accelerated death benefit rider

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19
Q

Which dividend option would an insurer invest the policyowner’s money and add any interest earnings as the dividends accrue?

A

Accumulation at Interest Option

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20
Q

The automatic premium loan provision authorizes an insurer to withdraw from a policy’s cash value the amount of ?

A

Past due premiums that have not been paid by the end grace period

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21
Q

In what part of an insurance policy are policy benefits found?

A

Declarations

22
Q

A life insurance rider that allows an individual to purchase insurance as they grow older, regardless of insurability, is called a(n)___?

A

Guaranteed insurability rider

23
Q

All of the following are considered to be nonforfeiture options available to policyowner EXCEPT?

A

Reduction of premium

24
Q

What is NOT considered to be nonforfeiture option in a whole life insurance policy?

A

Interest only

25
Q

Ownership of a life insurance policy may be temporarily transferred with a(n) ___?

A

Collateral assignment

26
Q

An insured individual and the policy’s beneficiary die from the same accident. The common disaster provision states the insurer will continue as if

A

the insured outlived the beneficiary

27
Q

Under a life insurance policy, what does the insuring clause state?

A

The insurer’s obligation to pay a death benefit upon an approved death claim.

28
Q

An endorsement found in an insurance plan which modified the provision of policy is called a(n)___?

A

Rider

29
Q

In order to activate the reinstatement clause of a lapse life insurance policy, the insured MUST ___?

A

Provide evidence of insurability to the insurer

30
Q

An insurer will accept a premium from the insured and continue the coverage in full force as though it was NOT late during which time period?

A

grace period

31
Q

Which of these is NOT considered to be a common life insurance nonforfeiture option?

A

Life income annuity

32
Q

A waiver of premium rider allows an insured to waive premium payments if the insured is ___?

A

Completely and permanently disabled

33
Q

What is an insurer required to do when faced with an error made under the Misstatements of Age provision?

A

Pay age-corrected benefits

34
Q

What is the name of the provision which states that copy of the application must be attached to the policy when issued?

A

Entire Contract

35
Q

The automatic premium loan provision authorized an insurer to withdraw from a policy’s cash value the amount of ___?

A

Last due premiums that have not been paid by the end of the grace period

36
Q

What is the purpose for having an accelerated death benefit on a life insurance policy?

A

It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill

37
Q

A guaranteed issue insurance policy has no

A

medical underwriting

38
Q

A provision that allows a policyowner to withdraw a policy’s cash value interest free a(n) ___?

A

Partial surrender

39
Q

Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value. She would like to borrow $15,000 against the cash value. Which of the following statements is TRUE?

A

Net death benefit will reduce if not loss is not repeated

40
Q

NOT part of an insurance contract?

A

Certificate of authority

41
Q

If an insured dies during the grace period with no premiums paid ____?

A

The policy would be payable, minus the premium amount

42
Q

A life insurance policyowner was injured in an automatic accident which results in a total and permanent disability. Which rider would pay a monthly amount because of this disability?

A

Disability income rider

43
Q

A Policyowner may exercise which of these dividend options that uses dividends to pay all or part of the next premium due

A

Reduction of premium dividend options

44
Q

Kurt in active duty serviceman who was recently killed in an accident while home on leave. Which military service exclusion clause would pay upon his death?

A

Results

45
Q

Under a life insurance policy, what does the insuring clause state?

A

The insurer’s obligation to pay a death benefit upon an approved death claim

46
Q

Which type of rider will waive the premium on a child’s life insurance policy if the parent paying the premium dies?

A

Payor benefit

47
Q

If an insured’s age on life insurance policy has been misstated what is the insurer’s liability if the insure dies?

A

A prorated death benefit based on the amount of insurance the insured’s premiums would have been if purchased at the correct age.

48
Q

Which of these dividends options are taxable?

A

Accumulation at interest

49
Q

NOT a characteristic of the Accelerated Death Benefit option?

A

benefit can be offered as a rider at a specific extra cost or may be at no cost

50
Q

In order to activate the reinstatement clause of a lapsed life insurance policy, the insured MUST ___?

A

Provide evidence of insurability to the insurer

51
Q

error was made on Mary’s life insurance application. Which of the following areas are errors commonly made on applications for which the incontestable clause does NOT apply?

A

Age

Life (6 decks)

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