Health & Life Insurance Exam Questions and Answers Rated A+

What is the advantage of reinstating a life insurance policy as opposed to applying for a new one? Policy premium in a reinstated policy will be set according to the insured's original age - When can an insurance company use suicide as a defense against paying a death claim? When a suicide is committed within a specified period of time after the policy is purchased (usually 2 years) - With the interest only settlement option, what happens to the policy's death benefit? Policy proceeds are retained by the insurance company; only the interest is paid to the beneficiary - In the fixed-period settlement option, how will the number of installments for the death benefit proceeds determine the amount of the installments? The longer the period selected, the smaller each installment will be - What term is used to describe methods of payment of the death benefit to the beneficiary upon the insured's death? Settlement options - An insurer has discovered a representation on a life insurance policy application regarding the insured's age. The insured is 10 years older than he stated on the application. What will the insurer do regarding the death benefit? Pay a reduced death benefit - A policyowner borrowed a portion of cash value from his whole life policy. If the loan is not repaid, how will that affect the death benefit to the beneficiary? The amount of the loan will be subtracted from the death benefit. - What are the dividend options in life insurance policies? Cash, reduced premium, accumulation at interest, paid-up additions, paid-up option, one-year term, and acceleration of endowment - What is the purpose of the Automatic Premium Loan provision? To prevent the unintentional lapse of a policy because of nonpayment of the premium - What nonforfeiture option is automatically selected by the company if not chosen by the policyowner? Extended term - With the reduction of premium dividend option, how is the dividend used? The dividend is applied to the next year's premium (it reduces the next year's premium). - What life policy rider allows the company to forgo collecting the premium if the insured becomes disabled? Waiver of premium - What are the most common exclusions in life insurance policies? War and military service, hazardous occupation, and aviation -