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When a lapsed policy's premium has been paid current, it has the potential of being
a. restored
b. renewed
c. reinstated
d. reinstituted
reinstated
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A life insurance guaranteed insurability rider gives the insured the right, without proving insurability, to
a. purchase life insurance policies on his children as they are born
b. purchase life insurance on a spouse after becoming married
c. purchases additional life insurance at anytime
d. periodically purchase additional insurance
periodically purchase additional insurance
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Scott has a life insurance policy in which the dividends are left with the insurance company. This particular policy may be paid up when the cash value plus accumulated dividends
a. equal the net single premium for the same face amount at the insured's attained age
b. can purchase extended term of coverage for a period of two years or more
c. equal the nonforfeiture value of the policy
d. can purchase a paid-addition
equal the net single premium for the same face amount at the insured's attained age
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Which of these statements is NOT true regarding a cash value loan against a life insurance policy?
a. interest normally accuses on unpaid balances
b. loan cannot exceed the policy's cash value
c. policy contract terms dictate the interest rate
d. interest payments made by policyowner are deductible
interest payments made by policyowner are deductible
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Which life insurance clause prohibits an insurance company from questioning the validity of the contract after a stated period of time has passed?
a. entire contract provision
b. grace period provision
c. incontestable clause
d. insuring cluase
incontestable clause
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After the extended term life nonforfeiture option is chosen, the available insurance will be
a. increasing term for a stated period of time
b. level term for a stated period of time
c. decreasing term for a stated period of time
d. renewable for a stated period of time
level term for a stated period of time
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The absolute assignment of a life insurance policy results in
a. all incidents of ownership transferred to the assignee
b. the assignee receives partial incidents of ownership
c. the transfer of ownership is revocable at the discretion of the original policyowner
d. evidence of insurability must be proven before ownership is transferred
all incidents of ownership transferred to the assignee
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How may an insurance company classify an accidental death benefit on a life policy?
a. as an optional policy rider
b. as a provision of the policy
c. as a nonforfeiture option
d. as a mandatory policy rider
as an optional policy rider
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A policyowner has a life insurance policy where she had listed her age on the application as 5 years younger than her actual age. If she dies and the insurer discovers the misstatement of age, how much will the insurance company pay?
a. Nothing
b. More than the face amount
c. Less than the face amount
d. Full face amount
Less than the face amount
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How is the insured protected if a payor benefit rider is attached to the life insurance policy?
a. premiums are waived if the payor becomes financially insolvent
b. policy loan will automatically cover the premiums if payor becomes disabled or dies
c. premium payments are waived in the event the premium payor dies or becomes disabled
d. policy loan will automatically cover the premiums if payor becomes financially insolvent
premium payments are waived in the event the premium payor dies or becomes disabled
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What is considered the collateral on a life insurance policy loan?
a. no collateral is needed
b. the policy's cash value
c. the policy's face value
d. the equity in a policyowner's home
the policy's cash value
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Which of these is NOT a common life insurance nonforfeiture option?
a. reduced paid-up insurance
b. extended term option
c. cash surrender option
d. life income annuity
life income annuity
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Which of the following is NOT a dividend option for a life insurance policy?
a. elect to take the dividends in cash
b. allow the dividends to accumulate with interest
c. use the dividends to pay all or part of the next premium due
d. receiving the entire policy cash value
receiving the entire policy cash value
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Which of the following is NOT a condition that must be met for an accidental death benefit to be paid?
a. injury must have been suffered prior to a stated age
b. accidental bodily injury must have been the cause of death
c. cause of death must be from a job-related injury
d. death must occur within a stated number of days after the accident
cause of death must be from a job-related injury
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What is the name of the rider that provides an additional purchase option in a life insurance policy?
a. payor rider
b. cost of living rider
c. waiver of premium rider
d. guaranteed insurability rider
guaranteed insurability rider
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Which statement regarding the life insurance premium for a children's rider is true?
a. decreasing premium as each child becomes an adult
b. premium remains the same no matter how many children
c. increasing premium as additional children are born
d. no premium is normally charged for a children's rider
premium remains the same no matter how many children
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Which benefit supplement added to a life insurance policy insures an entire family?
a. kin term rider
b. household term rider
c. family term rider
d. group term rider
family term rider
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An insured has a $25,000 whole life insurance policy with $6,000 cash value available. Under the extended term nonforfeiture option, what is the amount of insurance available to the insured?
a. $6,000
b. $19,000
c. $25,000
d. $31,000
$25,000
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Which life insurance policy provision allows a policyowner to cancel the policy and receive a full refund within a limited time period after policy delivery?
a. Grace period
b. Incontestable period
c. Elimination period
d. Free-look period
Free-look period
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A life insurance policy provision that has the ability to reduce the death benefit is called the
a. accelerated (living) benefit
b. insuring clause
c. payor benefit
d. spendthrift clause
accelerated (living) benefit
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