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Life Policy Provisions, Riders and Options > Primerica_ Riders and Options > Flashcards

Primerica_ Riders and Options Flashcards

1
Q

The provision which states that both the policy and a copy of the application form the contract between the policy owner and the insurer is called the…

A. complete contract
B. entire contract
C. total contract
D. aleatory contract

A

B. entire contract

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2
Q

Naming a trust as the beneficiary of a life insurance policy can accomplish all of the following for the policy holder except…

A. establish an account to fund the insured’s children’s education
B. give the policy owner flexibility in disbursing the proceeds of a death benefit
C. receive death benefit on behalf of beneficiaries who are minor children
D. allow the trustee to transfer the assets of the trust to their personal account

A

A. establish an account to fund the insured’s children’s education

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3
Q

Which of the following is TRUE about a class designation…

A. beneficiaries are not identified by name
B. beneficiaries must be part of the insured’s immediate family
C. it is not allowed
D. It determines the succession of beneficiaries

A

A. beneficiaries are not identified by name

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4
Q

What is a major problem with naming a trust as the beneficiary of a life insurance policy?

A. It is illegal to name a trust as a beneficiary.
B. The insured must have superintendent permission
C. They are expensive administer.
D. The insurance company will not pay the proceeds

A

C. They are expensive

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5
Q

An insured committed suicide 6 months after his life insurance policy was issued. The insurer will…

A. refund of premiums paid
B. pay the policy cash value
C. pay the full death benefit to the beneficiary
D. Pay nothing

A

A. refund premiums paid

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6
Q

An insured owns a life insurance policy. To be able to pay some of her bills, she withdraws a portion of the policy cash value. There is a limit for a withdrawal and the insurer charges a fee. What type of policy does she have?

A adjustable life
B. term life
C. limited pay
D. universal life

A

D. universal life

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7
Q

An insured purchased a life policy in 2010 and died in 2017. The insurance company discovers that at the time that the insured had concealed information during the application process. What can they do?

A. Pay a decreased death benefit
B. Sue for the right to not pay the death benefit
C. Pay the death benefit
D. Refuse to pay the death benefit because of the fraud

A

C. Pay the death benefit

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8
Q

The sole beneficiary of a life insurance policy dies before the insured. If the policy holder fails to change the beneficiary before the insured death, the proceeds of the policy will go to…

A. Probate
B. The state
C. The beneficiary’s estate
D. The insured’s estate

A

D. the insured’s estate

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9
Q

What happens when a policy is surrendered for its cash value?

A. Coverage ends, but the policy can be reinstated at any time.
B. The policy can be reinstated by paying back all the policy loans and premiums.
C. The policy can be converted to term coverage.
D. Coverage ends and the policy cannot be reinstated.

A

D. Coverage ends and the policy cannot be reinstated

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10
Q

Which of the following riders would NOT cause the Death Benefit to increase?

A. Guaranteed Insurability Rider
B. Cost of Living Rider
C. Accidental Death Rider
D. Payer Benefit Rider

A

D. Payer Benefit Rider

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11
Q

Which provision of a life insurance policy states the insurer’s duty to pay benefits upon the death of the insured, and to whom the benefits will be paid?

A. Beneficiary clause
B. Consideration clause
C. Insuring clause
D. Entire contract clause

A

C. Insuring clause

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12
Q

What is the purpose of a fixed-period settlement option?

A. To provide a guaranteed income for a certain amount of time.
B. To settle the insurance company’s liability
C. To provide a guaranteed income for life
D. To provide a guaranteed amount of money each month

A

A. To provide a guaranteed income for a certain amount of time.

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13
Q

Who has the legal title of the property in a trust?

A. Grantor
B. Beneficiary
C. Guardian
D. Trustee

A

D. Trustee

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14
Q

An insured pays an annual premium to his insurer. In return, the insurer promises to pay benefits in accordance with the terms of the contract. This is called…

A. Conditions
B. Utmost good faith
C. Acceptance
D. Consideration

A

D. Consideration

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15
Q

What is the advantage of reinstating a policy instead of applying for a new one?

A. Proof of insurability is not required
B. The face amount can be increased
C. The cash values have gained interest while the policy was lapsed
D. The original age is used for premium determination

A

D. The original age is used for premium determination

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16
Q

A father owns a life insurance policy on his 15 year old daughter. The policy contains the optional Payer Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums?

A. The premiums will be bcome tax deductible until the insured’s 18th birthday
B. Since it is the policyowner, and not the insured, who has become disabled, the life insurance policy will not be affected
C. The insured will have to pay premiums for 6 months. If at the end of this period the father is still disabled, the insured will be refunded the premiums.
D. The insured’s premiums will be waived until she is 21.

A

D. The insured’s premiums will be waived until she is 21

17
Q

What type of beneficiary designation allows the benefit to pass from a deceased primary beneficiary to the beneficiary’s heirs, instead of splitting the benefit among surviving primary beneficiaries?

A. Per stripes
B. By class
C. By the head
D. By capita

A

A. Per stripes

18
Q

An insured owns a 50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy’s cash value, which is currently 20,000. What would be the face amount of the new term policy?

A. $20,000
B. $25,000
C. $50,000
D. The face amount will be determined by the insurer

A

C. $50,000

19
Q

What type of insurance would be used for a Return of Premium rider?

A. Level term
B. Decreasing term
C. Annually renewable term
D. Increasing term

A

D. Increasing term

20
Q

An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do?

A. Pay a reduced death benefit.
B. Pay the full death benefit.
C. Pay nothing, there was a misrepresentation on the application.
D. Pay the full death benefit and refund excess premium.

A

A. Pay a reduced death benefit.

21
Q

All of the following are nonforfeiture options except…

A. reduced paid-up
B. interest only
C. cash surrender
D. extended term

A

B. interest only

22
Q

A policy owner who is also the insured wants to name her husband as the beneficiary of her life policy. She also wishes to retain all of the rights of ownership. The policyowner should have her husband named as the …

A. primary beneficiary
B. irrevocable beneficiary
C. revocable beneficiary
D. secondary beneficiary

A

C. revocable beneficiary

23
Q

Nonforfeiture values guarantee which of the following to the policy owner?

A. That the policy premiums will never increase.
B. That the cash value will not be lost.
C. That the dividends will be paid annually
D. That the death benefit will be paid in a lump sum

A

B. That the cash value will not be lost.

24
Q

The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the…

A. Incontestability clause
B. Reinstatement clause
C. Insuring clause
D. Misstatement of Age clause

A

A. Incontestability clause

25
Q

Which of the following methods to designate a beneficiary literally means “by the head”?

A. Contingent
B. Per capita
C. Per stirpes
D. Tertiary

A

B. Per capita

26
Q

An insured stops making payments on a loan taken from his cash value policy. What will most likely happen?

A. The insurer will not permit the policy owner to take out any more loans.
B. The policy will be reduced to an extended term option.
C. The policy will terminate when the loan amount with interest equals or exceeds the cash value.
D. The insurer will increase the interest rate on the loan and charge a penalty.

A

C. The policy will terminate when the loan amount with interest equals or exceeds the cash value.

27
Q

Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policy owner?

A. paid-up options
B. extended term
C. cash surrender
D. reduced paid-up

A

C. cash surrender

28
Q

When a life insurance policy is canceled and the insured has selected the extended term nonforfeiture option, the cash value will be used to purchase term insurance that has a face amount…

A. The same as the original policy minus the cash value
B. Equal to the original policy for as long a period of time that the cash values will purchase
C. In lesser amounts for the remaining policy term of age 100
D. Equal to the cash value surrendered from the policy

A

B. Equal to the original policy for as long a period of time that the cash values will purchase

29
Q

Which two terms are associated directly with the premium?

A. renewable or convertible
B. level or flexible
C. fixed or variable
D. term or permanent

A

B. level or flexible

30
Q

Naming a trust as the beneficiary of a life insurance policy can accomplish all of the following for the policy owner EXCEPT…

A. Receive death benefits on behalf of beneficiaries who are minor children.
B. Allow the trustee to transfer the assets of the trust to their personal account.
C. Establish an account to fund the insured’s children’s education.
D. Give the policy owner flexibility in disbursing the proceeds of a death benefit.

A

B. Allow the trustee to transfer the assets of the trust to their personal account.

31
Q

Children’s riders attached to whole life policies are usually issued as what type of insurance?

A. Term
B. Variable life
C. Adjustable life
D. Whole life

A

A. Term

32
Q

If an insured receives accelerated death benefits, what is the least amount of the original death benefit that the beneficiary would receive after the insured’s death?

A. 10%
B. 0%
C. 50%
D. 25%

A

B. 0%

Life Policy Provisions, Riders and Options (1 decks)

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