Policy provisions & riders

Question 1

Waiver of premium

Answer 1

Waives premium if insured becomes totally disabled.

Expires at 65.

Question 2

Total disability

Answer 2

Inability to work at all

Question 3

Waiver of Premium with Disability income

Answer 3

Premiums waived

Monthly income paid based on face value of policy

Question 4

Guaranteed Insurability

Answer 4

Can purchase more coverage
Specified date/ special event
Additional premium

Question 5

Does guaranteed insurability require evidence of insurability?

Answer 5

No

Question 6

Payor benefit

Answer 6

For children

if payor is disabled for six months/dies - premiums are waived to certain age

Question 7

Accidental death (how many days?)

Answer 7

90 to pay double indemnity

Question 8

Term riders

Answer 8

Additional temporary insurance
No additional policy
Greater protection, reduced cost

Question 9

Reinstatement

Answer 9

Lapsed policy
3 year max
Evidence of insurability
Restored to original status & retains original values

Question 10

Incontestability

Answer 10

Insurer can’t deny claim after it’s been in effect for

2 YEARS

Question 11

Absolute Assignment (transfer)

Answer 11

ALL right of ownership

No insurable interest necessary

Question 12

Collateral Assignment (transfer)

Answer 12

Transfer partial rights to another

Question 13

If someone commits suicide, what are the payouts?

Answer 13

before 2 years - refund of premium

after 2 years - pay death proceeds as normally

Question 14

What is a surrender charge?

Answer 14

. Fee when policy/ annuity is surrendered for cash value

Question 15

What is reduced paid-up insurance?

Answer 15

Cash value used as one-time premium
Purchase permanent, paid-up policy
Reduced face amount from other policy
Builds own cash value

Question 16

What is extended term (nonforfeiture)?

Answer 16

Cash value to convert term insurance
Same face amount as former policy
Last as long as the cash value can purchase

Question 17

What are dividends?

Answer 17

Return of excess premiums.

Question 18

Are dividends taxable?

Answer 18

No.

Question 19

Are dividends guaranteed?

Answer 19

No.

Question 20

Dividends: Accumulation at interest

Answer 20

Dividends kept in acct to accumulate interest

Question 21

When can policyowner withdraw dividends from accumulation at interest?

Answer 21

Any time.

Question 22

Dividends: Paid-up additions

Answer 22

Dividends buy single premium policy

Increase death benefit on original policy

Question 23

Dividends: Paid-up option

Answer 23

Dividends plus interest and cash value

Pay off early!

Question 24

Dividends: One year term

Answer 24

Dividends buy more one-year insurance

Increases death benefit

Question 25

Dividends: Acceleration of Endowment

Answer 25

Dividends plus interest used to shorten endowment period

Question 26

What is the waiting period for the waiver of premium?

Answer 26

6 months

Question 27

What nonforfeiture option will be automatically chosen if the policyowner has not chosen one?

Answer 27

Extended Term