Life Insurance Chapter 4 Exam Questions And Answers Rated A+

If an insured under a variable life insurance policy dies, how will the insurer respond to outstanding policy loans the loan amounts are deducted from the death benefit A policy owner who is also the insured wants to name her husband as the beneficiary of her policy. She also wishes to retain all of the rights of ownership. The policy owner should have have her husband named as. revocable beneficiary Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member? family term rider all of the following are nonforfeiture options except interest only Children's riders attached to whole life policies are usually issued as what type of insurance? term the two types of assignments are absolute and collateral which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium Automatic premium loan which of the following allows the insurer to relieve a minor insured from premium payments if the minors parents have died or become disabled payor benefit the interest earned on policy dividends is taxable If a settlement option is not chosen by the policy owner or the beneficiary, what option will be used lump sum How long will the beneficiary receive payments under the single life settlement option? until the beneficiaries death What limits the amount that a policyowner may borrow from a whole life insurance policy? cash value A couple owns a life insurance policy with a Children's Term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability? proof of insurability is not required A long stretch of national economic hardship causes a 7% rate of inflation. A policyowner notices that the face value of her life insurance policy has been raised 7% as a result. Which policy rider caused this change? cost of living rider all of the following are true regarding the guaranteed insurability rider except this rider is available to all insureds with no additional premium What is the name of the clause that is included in a policy that limits or eliminates the death benefit if the insured dies as a result of war or while serving in the military war or military service all of the following are dividend options except Fixed period installments what is the purpose of settlement options They determine how death proceeds will be paid all of the following are beneficiary designations except specified what is true concerning accidental death rider It will pay double or triple the face amount If an insured continually uses the automatic premium loan option to pay the policy premium, the policy will terminate when the cash value is reduced to nothing What is the other term for the cash payment settlement option? lump sum If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a guaranteed insurability rider The owner of a life insurance policy wishes to name two beneficiaries for the policy proceeds. What will the soliciting insurance producer say? the policy owner can specify the way proceeds are split in the policy which of the following components must a life insurance policy have to allow policy loans cash value We have an expert-written solution to this problem! which of the following statements about the reinstatement provision is true it requires the policyowner to pay all overdue premiums with interest before the policy is reinstated An insured will be allowed to reactivate her lapsed life insurance policy if action is taken within a certain period of time, and proof of insurability. which policy provision allow this? reinstatement provision According to the entire contract provision, what document must be made part of the insurance policy? copy of the original application A business owner was trying to obtain a bank loan to fund the purchase of a new business facility, but the bank required proof of additional assets to secure the loan. The business owner then decided to use her $250,000 life insurance policy to secure the loan. Which provision makes this possible? collateral assignment We have an expert-written solution to this problem! what is true about a suicide clause in a life insurance policy suicide is excluded for a specific period of years and covered thereafter A provision in a life insurance policy that provides for the early payment of some portion of the policy face amount should the insured suffer from a terminal illness or injury is called accelerated benefit provision When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount? equal to the original policy for as long as the cash values will purchase A rider that may be attached to a life insurance policy that will adjust the face amount based upon a specific index, such as the Consumer Price Index, is called cost of living rider