Insurance Ch 3

Which of the following is TRUE about nonforfeiture values? A A table showing nonforfeiture values for the next 10 years must be included in the policy. B Policyowners do not have the authority to decide how to exercise nonforfeiture values. C They are required by state law to be included in the policy. D They are optional provisions.

Which of the following is true of a children's rider added to an insured's permanent life insurance policy? A It is permanent insurance. B The policy covers only the natural children of the insured. C Each child covered must show evidence of insurability. D It is term coverage that is convertible to permanent insurance at or prior to the child reaching the maximum coverage age.

All of the following are true regarding the guaranteed insurability rider EXCEPT A The insured may purchase additional insurance up to the amount specified in the base policy. B It allows the insured to purchase additional amounts of insurance without proving insurability only at specified dates or events. C This rider is available to all insureds with no additional premium. D The insured may purchase additional coverage at the attained age.

The policyowner pays for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this? A Paid-up addition B Accumulation at interest C Cash option D Reduction of premium

What is the other term for the cash payment settlement option? A Proceeds B Lump sum C Principal amount D Face amount

Which of the following statements is TRUE concerning the Accidental Death Rider? A It is only available in group insurance. B It will pay double or triple the face amount. C It is also known as a triple indemnity rider. D This rider is only available to insureds over the age of 65.

The provision which states that both the policy and a copy of the application form the contract between the policyowner and the insurer is called the A Total contract. B Aleatory contract. C Complete contract. D Entire contract.

When the policyowner specifies a dollar amount in which installments are to be paid, he/she has chosen which settlement option? A Extended term B Fixed amount C Fixed period D Life income period certain

What is the clause that describes the method of paying the death benefit in the event that the insured and beneficiary are both killed in the same accident? A Nonforfeiture Clause B Common Disaster Clause C Spendthrift Clause D Settlement Clause

Items stipulated in the contract that the insurer will not provide coverage for are found in the A Exclusions clause. B Insuring clause. C Benefit Payment clause. D Consideration clause.

If a policy has an automatic premium loan provision, what happens if the insured dies before the loan is paid back? A The policy beneficiary takes over the loan payments. B The policy is rendered null and void. C The balance of the loan will be taken out of the death benefit. D The policy beneficiary receives the full death benefit.

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? A Ownership provision B Collateral assignment C Insurable interest D Modification clause

When a life insurance policy is cancelled 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.

What is the waiting period on a Waiver of Premium rider in life insurance policies? A 30 days B 3 months C 5 months D 6 months

Under which of the following circumstances would an insurer pay accelerated benefits? A A couple wants to build a house and would like to make a larger down payment. B An insured is diagnosed with cancer and needs help paying for her medical treatment. C A couple is nearing retirement and needs a steady stream of income. D An insured is looking for a way to put her daughter through college.

An individual is purchasing a permanent life insurance policy with a face value of $25,000. While this is all the insurance that he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy? A Nonforfeiture options B Guaranteed insurability option C Dividend options D Guaranteed renewable option

All of the following are Nonforfeiture options EXCEPT A Cash surrender B Extended term C Reduced paid-up D Interest only

The paid-up addition option uses the dividend A To reduce the next year's premium. B To accumulate additional savings for retirement. C To purchase a smaller amount of the same type of insurance as the original policy. D To purchase a one-year term insurance in the amount of the cash value.

What is the term for how frequently a policyowner is required to pay the policy premium? A Consideration B Mode C Schedule D Grace period

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.

The insured under a $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple indemnity rider in the policy specifies that the death must not be contributed to by the insured in any manner. In this case, what will the policy beneficiary receive? A $0 B $50,000 (50% of the policy value) C $100,000 D $300,000 (triple the amount of policy value)

The two types of assignments are A Absolute and collateral. B Absolute and partial. C Complete and partial. D Complete and proportionate.

When a life insurance policy was issued, the policyowner designated a primary and a contingent beneficiary. Several years later, both the insured and the primary beneficiary died in the same car accident, and it was impossible to determine who died first. Which of the following would receive the death benefit? A The insured's contingent beneficiary B The insurance company C The insured's estate D The primary beneficiary's estate

Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled? A Waiver of Premium B Payor Benefit C Jumping Juvenile D Juvenile Premium Provision

Which of the following statements about a suicide clause in a life insurance policy is true? A Suicide is excluded for a specific period of years and covered thereafter. B Suicide is covered for a specific period of years and excluded thereafter. C Suicide is covered as long as the policy is in force. D Suicide is excluded as long as the policy is in force.

Which of the following riders would NOT cause the Death Benefit to increase? A Cost of Living Rider B Accidental Death Rider C Payor Benefit Rider D Guaranteed Insurability Rider

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 A Nonforfeiture option. B Guaranteed insurability rider. C Paid-up additions option. D Cost of living provision.

An insured purchased a 15-year level term life insurance policy with a face amount of $100,000. The policy contained an accidental death rider, offering a double indemnity benefit. The insured was severely injured in an auto accident, and after 10 weeks of hospitalization, died from the injuries. What amount would his beneficiary receive as a settlement? A $0 B $100,000 C $200,000 D $100,000 plus the total of paid premiums

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

Which of the following best describes fixed-period settlement option? A The death benefit must be paid out in a lump sum within a certain time period. B Income is guaranteed for the life of the beneficiary. C Both the principal and interest will be liquidated over a selected period of time. D Only the principal amount will be paid out within a specified period of time.

A father purchases a life insurance policy on his teenage daughter and adds the Payor Benefit rider. In which of the following scenarios will the rider waive the payment of premium? A If the daughter is disabled for any length of time B If the father is disabled for more than 6 months C If the father is disabled for at least a year D If the daughter is disabled for more than 3 months

Which of the following is true about the premium on the children's rider in a life insurance policy? A It decreases when the oldest child reaches the age of 21. B It increases when a newborn baby is added to the policy. C It decreases when an adopted child is added to the policy. D It remains the same no matter how many children are added to the policy.

What is the benefit of choosing extended term as a nonforfeiture option? A It can be converted to a fixed annuity. B It has the highest amount of insurance protection. C It matures at age 100. D It allows for coverage to continue beyond maturity date.

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

The sole beneficiary of a life insurance policy dies before the insured. If the policyowner fails to change the beneficiary before the insured's death, the proceeds of the policy will go to A The state. B The beneficiary's estate. C The insured's estate. D Probate.

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 0% B 50% C 25% D 10%

Nonforfeiture values guarantee which of the following for the policyowner? A That the death benefit will be paid in a lump sum B That the policy premiums will never increase C That the cash value will not be lost D That the dividends will be paid annually

Upon the death of the insured, the primary beneficiary discovers that the insured chose the interest only settlement option. What does this mean? A The primary beneficiary will receive the death benefit and the secondary beneficiaries will share the interest payments. B The beneficiary will only receive payments of the interest earned on the death benefit. C The beneficiary must pay interest to the insurer. D The beneficiary will receive the lump sum, plus interest.

If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select? A Interest only B Fixed period C Life with period certain D Fixed amount

When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to A Purchase a term rider to attach to the policy. B Pay back all premiums owed plus interest. C Receive payments for a fixed amount. D Purchase a single premium policy for a reduced face amount.

Life income joint and survivor settlement option guarantees A Payout of the entire death benefit. B Equal payments to all recipients. C Income for 2 or more recipients until they die. D Payment of interest on death proceeds.

According to the Entire Contract provision, a policy must contain A A declarations page with a summary of insureds. B Buyer's guide to life insurance. C Listing of the insured's former insurer(s) for incontestability provisions. D A copy of the original application for insurance.

An absolute assignment is a A Transfer of some ownership rights in a policy. B Change of beneficiary. C Change of insurer. D Transfer of all ownership rights in a policy.

The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called A Waiver of cost of insurance. B Payor benefit. C Waiver of premium. D Guaranteed insurability.

When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy? A It is reduced to the amount of what the cash value would buy as a single premium. B It is increased when extra premiums are paid. C It decreases over the term of the policy. D It remains the same as the original policy, regardless of any differences in value.

The dividend option in which the policyowner uses dividends to purchase a term policy for one year is referred to as the A One-year term option. B Paid-up option. C Accelerated endowment. D Paid-up additions.

Which of the following policy components contains the company's promise to pay? A Entire contract provision B Insuring clause C Premium mode D Consideration clause

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

Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member? A Spouse rider B Children's rider C Additional insured rider D Family term rider

An insured purchased a life insurance policy on his life naming his wife as primary beneficiary, and his daughter as contingent beneficiary. Under what circumstances could the daughter collect the death benefit? A If the insured died from accidental means B If the primary beneficiary predeceases the insured C The primary and contingent beneficiaries share death benefits equally D With the primary beneficiary's written consent

A 40-year old man buys a whole life policy and names his wife as his only beneficiary. His wife dies 10 years later. He never remarries and dies at age 61, leaving 2 grown-up children. Assuming he never changed the beneficiary, the policy proceeds will go to A Both children who share equally on a per-capita basis. B The insurance company. C The insured's estate. D The insured's firstborn child.

A rider attached to a life insurance policy that provides coverage on the insured's family members is called the A Other-insured rider. B Change of insured rider. C Juvenile rider. D Payor rider.

Which of the following statements is TRUE about a policy assignment? A It authorizes an agent to modify the policy. B It transfers rights of ownership from the owner to another person. C It is the same as a beneficiary designation. D It permits the beneficiary to designate the person to receive the benefits.

The Ownership provision entitles the policyowner to do all of the following EXCEPT A Set premium rates. B Receive a policy loan. C Assign the policy. D Designate a beneficiary.

The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policyowner choose? A Joint and survivor B Fixed amount option C Interest only option D Life income with period certain

Which of the following would be deducted from the death benefit paid to a beneficiary, if a partial accelerated death benefit had been paid while the insured was still alive? A 10% federal death benefit income tax, plus the amount of the accelerated benefit B Amount paid with the accelerated benefit, plus the earnings lost by the insurance company in interest income from the accelerated benefit C There are no deductions taken from death benefits. D Penalty imposed for early withdrawal of the death benefit, plus the amount of earnings lost by the insurance company in interest income

What is the waiting period on a Waiver of Premium rider in life insurance policies? A 30 days B 3 months C 5 months D 6 months

A life insurance policy does not have a war clause. If the insured is killed during a time of war, what will the beneficiary receive from the policy? A The policy's cash value B A refund of premiums C Nothing, since the insured was killed as a result of a war D The full death benefit

If a settlement option is not chosen by the beneficiary or policyowner, which option will be used? A Life income B Fixed period C Fixed amount D Lump sum

Which of the following, when attached to a permanent life insurance policy, allows the policyowner to customize the policy to provide an additional amount of temporary insurance on the insured, or allows amounts of temporary insurance to cover other family members? A Term rider B Accidental death and dismemberment rider C Guaranteed insurability rider D Change of insured rider

When an insured under a life insurance policy died, the designated beneficiary received the face amount of the policy as well as a refund of all of the premiums paid. Which rider is attached to the policy? A Return of premium B Cost of living C Decreasing term D Premature death

An insured pays $1,200 annually for her life insurance premium. The insured applies this year's $300 worth of accumulated dividends to the next year's premium, thus reducing it to $900. What option does this describe? A Flexible Premium B Reduction of Premium C Accumulation at Interest D Cash option

What happens when a policy is surrendered for its cash value? A The policy can be converted to term coverage. B Coverage ends and the policy cannot be reinstated. C Coverage ends but the policy can be reinstated at any time. D The policy can be reinstated by paying back all policy loans and premiums.

If a life insurance policy has an irrevocable beneficiary designation, A The owner can always change the beneficiary at will. B The beneficiary cannot be changed. C The beneficiary can only be changed with written permission of the beneficiary. D The beneficiary cannot be changed for at least 2 years.

What provision in an insurance policy extends coverage beyond the premium due date? A Free look B Automatic premium loan C Waiver of premium D Grace period

Which is true about a spouse term rider? A The rider is usually level term insurance. B Coverage is allowed for an unlimited time. C The rider is decreasing term insurance. D Coverage is allowed up to age 75.

The interest earned on policy dividends is A 40% taxable, similar to a capital gain. B Taxable. C Nontaxable. D Tax deductible.

An insured had a $10,000 term life policy. The annual premium of $200 was due on February 1; however, the insured failed to pay the premium. He died on February 28. How much would the beneficiary receive from the policy? A $0 B $200 C $9,800 D $10,000

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? A Medical exam and parents' medical history B Proof of insurability is not required. C Medical exam D Her parents' federal income tax receipts

An insured misstates her age at the time the life insurance application is taken. This misstatement may result in A Adjustment in the amount of death benefit. B No change whatsoever. C Automatic lapse. D Recession of the policy.

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

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 is provided. Which policy provision allows this? A Incontestable clause B Grace period C Reinstatement provision D Waiver of premium provision

Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policyowner? A Reduced paid-up B Paid-up options C Extended term D Cash surrender

Which two terms are associated directly with the premium? A Term or permanent B Renewable or convertible C Level or flexible D Fixed or variable

Which of the following is NOT typically excluded from life policies? A Self-inflicted death B Death that occurs while a person is committing a felony C Death due to war or military service D Death due to plane crash for a fare-paying passenger

What would be an advantage to naming a contingent (or secondary) beneficiary in a life insurance policy? A It ensures the policy proceeds will be split between the primary and contingent beneficiaries. B It requires that someone who is not the primary beneficiary handles the estate. C It determines who receives policy benefits if the primary beneficiary is deceased. D It allows creditors to receive payment out of the proceeds.

All of the following are TRUE statements regarding the accumulation at interest option EXCEPT A The interest is credited at a rate specified by the policy. B The policyholder has the right to withdraw the accumulations at any time. C The interest is not taxable since it remains inside the insurance policy. D The annual dividend is retained by the company.

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

Under an extended term nonforfeiture option, the policy cash value is converted to A A higher face amount than the whole life policy. B The same face amount as in the whole life policy. C The face amount equal to the cash value. D A lower face amount than the whole life policy.

The accelerated benefits provision will provide for an early payment of the death benefit when the insured A Needs to borrow money. B Has earned enough credits. C Becomes disabled. D Becomes terminally ill.

Who can request changes in premium payments, face value, loans, and policy plans? A Producer B Policyowner C Contingent beneficiary D Beneficiary

When may an insurance company use suicide as a defense against paying a death claim? A Only when there was a witness to the event B At any time suicide can be proven C At no time D When death occurs within a specified period of time after the policy was issued

An insured purchases a policy in 2008 and died in 2013. The insurance company discovers at that time that the insured 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

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

Which of the following factors determines the amount of each installment paid in a Life Income Option arrangement? A Recipient's health and death benefits B Projected life insurance and health insurance C Recipient's life expectancy and amount of principal D Projected income

Which of the following is true about the mandatory free look in a Life Insurance policy? A It applies only to term life insurance policies. B It is optional on all life insurance policies. C It commences when the policy is delivered. D It commences when the application is signed.

Which is TRUE about the cash surrender nonforfeiture option? A After the cash surrender, the insured is covered for a grace period of 1 month. B The policy remains active for some time after the policyholder opts for cash surrender. C The policyholder receives the original cash value of the policy. D Funds exceeding the premium paid are taxable as ordinary income.

Which of the following statements is TRUE concerning irrevocable beneficiaries? A They may be changed only on the anniversary date of the policy. B They can be changed only with the written consent of that beneficiary. C They may be changed at any time. D They can never be changed.

An insured and his wife are both involved in a head-on collision. The husband dies instantly, and the wife dies 15 days later. The company pays the death benefit to the estate of the insured. This indicates that the life insurance policy had what provision? A Common Disaster B Accidental Death C Survivor Life D Second-to-Die

An insured has a life insurance policy from a participating company and receives quarterly dividends. He has instructed the company to apply the policy dividends to increase the death benefit. The dividend option that the insured has chosen is called A Paid-up additions. B One-year term purchase. C Accumulation at interest. D Reduction of premiums.

Which of the following explains the policyowner's right to change beneficiaries, choose options, and receive proceeds of a policy? A The Consideration Clause B Assignment Rights C Owner's Rights D The Entire Contract Provision

All of the following are dividend options EXCEPT A Paid-up additions. B Fixed-period installments. C Accumulated at interest D Reduction of premium.

Regarding the free-look provision, the insurance company A Cannot charge a premium after 10 days. B Must issue a free policy for 30/31 days. C Must issue a free policy for 10 days. D Must allow the policyowner to return the policy for a full refund.

What is the advantage of reinstating a policy instead of applying for a new one? A The face amount can be increased B The cash values have gained interest while the policy was lapsed C The original age is used for premium determination D Proof of insurability is not required

The validity of coverage under a life insurance policy may not be contested, except for nonpayment of premium, after the policy has been in force for at least how many years? A 1 year B 2 years C 5 years D 7 years

If a life insurance policy has an irrevocable beneficiary designation, A The beneficiary cannot be changed for at least 2 years. B The owner can always change the beneficiary at will. C The beneficiary cannot be changed. D The beneficiary can only be changed with written permission of the beneficiary.

Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary? A Fixed-amount B Life income with period certain C Joint and survivor D Single life

An insured receives an annual life insurance dividend check. What term best describes this arrangement? A Accumulation at Interest B Cash option C Reduction of Premium D Annual Dividend Provision

All of the following are true regarding insurance policy loans EXCEPT A Policy loans can be made on policies that do not accumulate cash value. B The amount of the outstanding loan and interest will be deducted from the policy proceeds when the insured dies. C The policy will terminate if the loan plus interest equals or exceeds the cash value of the policy. D Policyowners can borrow up to the full amount of their whole life policy's cash value.

A policyowner fails to pay the premium due on his whole life policy after the grace period passes, but the policy remains in force. This is due to what provision? A Assignment B Automatic premium loan C Waiver of premium D Incontestability period

Which of the following statements about the reinstatement provision is true? A It permits reinstatement within 10 years after a policy has lapsed. B It provides for reinstatement of a policy regardless of the insured's health. C It guarantees the reinstatement of a policy that has been surrendered for cash. D It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated.

All of the following statements concerning dividends are true EXCEPT A Dividend amounts are guaranteed in the policy. B Lower insurance company costs generate higher dividends. C They stem from favorable underwriting experience. D Favorable investment results generate higher dividends.

What is the purpose of a free-look period in insurance policies? A It allows the insurer to cancel coverage if a misrepresentation is discovered. B It allows the insured to reject the policy with a full refund. C It allows the insured 10 days to pay the initial premium. D It allows the insurer to temporarily suspend coverage after an insured's disability.

A policyowner 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.

If the policyowner, the insured, and the beneficiary under a life insurance policy are three different people, who has the ownership rights? A Policyowner B The insured and the policyowner C Beneficiary D Insured

The insured had his wife named as the beneficiary of his life insurance policy. To ensure that his wife had income for life after the insured's death, he chose the life income settlement option. The amount of payments will be determined by taking into account all of the following EXCEPT A Face amount of the policy. B The insured's age at death. C The beneficiary's life expectancy. D Projected interest rates.

In a case where the primary beneficiary predeceases the insured, in the event of the insured's death, the death benefit proceeds will be paid to A The insurance company. B The contingent beneficiary. C The insured's spouse. D The policyowner.

An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries? A One of the beneficiaries will receive 1/3 and the other 2/3 of the proceeds when the insured dies. B The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive. C The beneficiary will receive 2/3 of the lump sum up front, and the remaining 1/3 will be paid over time. D The beneficiary will receive 2/3 of the total benefit, with the final 1/3 payable when the first beneficiary dies.

Which option is being utilized when the insurer accumulates dividends at interest and then uses the accumulated dividends, plus interest, and the policy cash value to pay the policy up early? A Paid-up additions B Dividend Accumulation option C Paid-up option D Accumulation at Interest

If an insured continually uses the automatic premium loan option to pay the policy premium, A The insurer will increase the premium amount. B The policy will terminate when the cash value is reduced to nothing. C The face amount of the policy will be reduced by the automatic premium loan amount. D The cash value will continue to increase.

The automatic premium loan provision is activated at the end of the A Elimination period. B Policy period. C Grace period. D Free-look period

Which nonforfeiture option provides coverage for the longest period of time? A Extended term B Paid-up option C Accumulated at interest D Reduced paid-up

Which nonforfeiture option has the highest amount of insurance protection? A Extended Term B Conversion C Decreasing Term D Reduced Paid-up

What is the name of a 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? A Hazardous occupation B Military service or war C Limited D Aviation

Which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium? A Extended term B Reinstatement C Reduce-paid up D Automatic premium loan

Which of the following premium payment modes will incur the lowest overall payment? A Annual B Semi-annual C Quarterly D Monthly

Which of the following information will be stated in the consideration clause of a life insurance policy? A The time period allowed for the payment of premium B The conditions for insurability C The amount of premium payment D The parties to the contract

Which of the following named beneficiaries would NOT be able to receive the death benefit directly from the insurer in the event of the insureds' death? A The wife of the deceased insured B The former wife of the deceased insured C A minor son of the insured D A business partner of the insured

An insured committed suicide 6 months after his life insurance policy was issued. The insurer will A Pay the policy's cash value. B Pay the full death benefit to the beneficiary. C Pay nothing. D Refund the premiums paid.

Which is NOT true about beneficiary designations? A The policy does not have to have a beneficiary named in order to be valid. B Trusts can be valid beneficiaries. C The beneficiary must have insurable interest in the insured. D The beneficiary may be a natural person.

What required provision protects against unintentional lapse of the policy? A Payment of premiums B Reinstatement C Grace period D Assignment

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.

An insured misstates her age at the time the life insurance application is taken. This misstatement may result in A Automatic lapse. B Recession of the policy. C Adjustment in the amount of death benefit. D No change whatsoever.

Which of the following determines the length of time that benefits will be received under the Fixed-Amount settlement option? A Size of each installment B Predetermined length of time stated in the contract C Length of income period D Amount of interest

An insured has a continuous premium whole life policy. She would like to use the policy dividends to pay off her policy sooner than would have been possible otherwise. What dividend option could she use? A Paid-up option B One-year term C Reduction of premium D Accumulation at interest