Policy Provisions Quiz

Question 1

A long-term care writer in a life insurance policy pays a daily benefit in the event of which of the following?

Answer 1

Inability of the insured to perform more than two activities of daily living (ADL‘s)

Question 2

A return of premium life insurance policy is:

Answer 2

Whole life and increasing term

Question 3

J let her life insurance policy lapse eight months ago due to nonpayment. She can reestablish coverage under which of the following provisions?

Answer 3

Reinstatement provision

Question 4

An insured inability to perform two or more activities of daily living may trigger which type of life policy rider?

Answer 4

Long-term care

Question 5

Kay’s whole life insurance policy lapsed two months ago due to nonpayment. She would now like to reinstate the policy. All of these statements are correct about policies reinstatement except:

Answer 5

OK, will forfeit the right to use the automatic loan provision upon reinstatement

Question 6

The accelerated death benefit provision in a life insurance policy is known as a:

Answer 6

Living benefit

Question 7

The consideration clause in a life insurance contract contains what pertinent information?

Answer 7

Amount of premium payments and when they are due

Question 8

All of the following statements are true regarding a policies, grace period, Except:

Answer 8

Past due premiums are waived

Question 9

D owns a whole life policy that was purchased 10 years ago. If the premium payments suddenly stop and D takes no additional action, which nonforfeiture option will the insurer likely proceed with?

Answer 9

Extended term nonforfeiture option

Question 10

S buys a $10,000 whole life policy in 2003 and pays an annual premium of $100. S dies five years later in 2008 and the insurer pays the beneficiary $10,500. What kind of Ryder did S include on the policy?

Answer 10

Return of premium rider

Question 11

Which of these actions is taken when a policy owner uses a life insurance policy as collateral for a bank loan?

Answer 11

Collateral assignment

Question 12

The agreement in a life insurance contract that states a specific sum of money will be paid to a designated person upon an insured’s death is called:

Answer 12

Insuring agreement

Question 13

Which writer provides coverage for a child under a parents life insurance policy?

Answer 13

Child term rider

Question 14

What does the ownership clause in a life insurance policy state?

Answer 14

Who the policy owner is and what writes the policy owner is entitled to

Question 15

Which of the following non-forfeiture options offers the highest death benefit?

Answer 15

Extended term

Question 16

Which of the following is an example of a non-forfeiture option?

Answer 16

Reduced paid up option

Question 17

Which of the following provisions guarantees that premiums will be waived if a juvenile life policy owner becomes disabled?

Answer 17

Payor clause

Question 18

Which statement is true in regards to a policy loan?

Answer 18

Past due interest on a policy loan is added to the total debt

Question 19

Additional coverage can be added to a whole life policy by adding a

Answer 19

Decreasing term rider

Question 20

Which of these types of policies may not have the automatic premium loan provision attached to it?

Answer 20

Decreasing term