The Individual Life Insurance Contract Quizzes

16 June 2024

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7 test answers

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question

Which is true about the cash surrender nonforfeiture option?

answer

Funds exceeding the premium paid are taxable as ordinary income

question

What allows the policy holder to apply policy dividends towards the next year's premium

answer

Reduction of Premium Option

question

What is true about nonforfeiture values?

answer

Required by state law to be included in the policy

question

Which of the following statements about a suicide clause in a life insurance policy is true?

answer

Suicide is excluded for a specific period of years and covered thereafter

question

Which of the following is true regarding a single life settlement option?

answer

it provides income the beneficiary cannot outlive

question

Which nonforfeiture option provides coverage for the longest period of time

answer

Reduced paid-up

question

When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to

answer

purchase a single premium policy for a reduced face amount