S Would Like To Use Dividends

Question: When does a Guaranteed Insurability Rider allow the insured to buy additional coverage?

Answer: at future dates specified in the contract with no evidence of insurability required

Question: S would like to use dividends from her life insurance policy to purchase paid-up additions. All of these would be factors that determine how much coverage can be purchased EXCEPT

Answer: beneficiary's age

Question: When an insurer issues a policy that refuses to cover certain risks, this is referred to as a(n)

Answer: exclusion

Question: What provision in a life insurance policy states that the application is considered part of the contract?

Answer: Entire Contract provision

Question: Which of the following provisions guarantees that premiums will be waived if a Juvenile Life policyowner becomes disabled?

Answer: Payor clause

Question: Which of these is NOT considered to be a right given to a policyowner?

Answer: Modify a provision in the insurance contract

Question: How do life insurance companies handle cases where the insured commits suicide within the contract's stated Contestable period?

Answer: Claims are denied under the Suicide clause of the policy

Question: M had an annual life insurance premium payment due January 1. She died January 10 without making the premium payment. What action will the insurer take?

Answer: Pay face amount minus the past due premium

Question: In a Life insurance contract, an insurance company's promise to pay stated benefits is called the

Answer: Insuring clause

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

Answer: Who the policyowner is and what rights the policyowner is entitled to

Question: The automatic premium loan provision is designed to

Answer: avoid a policy lapse

Question: S buys a $50,000 whole life policy with a $50,000 Accidental Death and Dismemberment rider. S dies 1 year later of natural causes. How much will the insurer pay the beneficiary?

Answer: 50000

Question: An insured is past due on his life insurance premium, but is still within the Grace Period. What will the beneficiary receive if the insured dies during this Grace Period?

Answer: Full face amount minus any past due premiums

Question: A provision in a life insurance policy that pays the policyowner an amount that does not surpass the guaranteed cash value is called the

Answer: Policy Loan provision

Question: The Consideration clause in a life insurance contract contains what pertinent information?

Answer: Amount of premium payments and when they are due

Question: The incontestable clause allows an insurer to

Answer: contest a claim during the contestable period

Question: All of these statements about the Waiver of Premium provision are correct EXCEPT

Answer: Insured must be eligible for Social Security disability for claim to be accepted

Question: Which of the following statements is CORRECT about accelerated death benefits?

Answer: Must have a terminal illness to qualify

Question: Which statement regarding the Misstatement of Age provision is considered to be true?

Answer: Coverage will be adjusted to reflect the insured's true age if a misstatement of age is discovered

Question: S has a Whole Life policy with a premium payment due soon. Which provision would keep the policy in force if S does not make the required payment and the policy has adequate cash value from which the premium payment can be made?

Answer: Automatic Policy Loan

Question: Which of these life insurance riders allows the applicant to have excess coverage?

Answer: Term rider

Question: P purchases a $50,000 term life insurance policy in 2005. One of the questions on the application ask if P engages in scuba diving, to which P answers "No". The policy is then issued with no scuba exclusions. In 2010, P takes up scuba diving and dies in a scuba-related accident in 2011. What will the insurer pay to P's beneficiary?

Answer: $50,000 minus any outstanding policy loans

Question: Which of these statements about a Guaranteed Insurability Option rider is NOT TRUE?

Answer: Evidence of insurability is required when the option is exercised

Question: D is the policyowner and insured for a $50,000 life insurance policy. The beneficiary is D's wife. D and his wife divorce and D remarries, transferring ownership of his policy to his new wife. If D dies without making any further changes, to whom will the policy proceeds be paid to?

Answer: Ex-wife

Question: Which of these are NOT an example of a Nonforfeiture option?

Answer: Life Income

Question: P is the insured on a participating life policy. Which statement is true if P's premiums are waived due to a disability?

Answer: P will still receive declared dividends

Question: N is covered by a Term Life policy and does not make the required premium payment which was due August 1. N dies September 15. What action will the insurer take?

Answer: Claim will be denied

Question: Which of these Nonforfeiture Options continue a build-up of cash value?

Answer: Reduced Paid-Up