What is the name of the provision which states that a copy of the application must be attached to the policy when issued? A) Policy Summary If the consumer price index has gone up 4%, how much may Ron increase the face value of the policy? The meaning of NONFORFEITURE is failure or refusal to forfeit something often used before another noun. C) Settlement options Which of these would limit a companys liability to provide insurance coverage? C) Paid-up option She has been working in the financial planning industry for over 20 years and spends her days helping her clients gain clarity, confidence, and control over their financial lives. B) Reinstatement provision \text { Interest Expense } & \underline{~~~~~~~~~~4,500} &\underline{~~~~~~~~~~~~~~~~~~~} \\ C) aviation D) juvenile waiver rider, If an insured dies during the grace period with no premiums paid, A) the policy would be payable, minus the premium amount S dies 5 years later in 2008 and the insurer pays the beneficiary $10,500. C) Incontestability Eric purchased a cash value life insurance policy six years ago. Exam Review #1 Flashcards | Chegg.com Which statement is true regarding policy dividends? B) aviation D) The amount of premiums paid will be returned with interest, C) The death benefit paid will be what the premium would be purchased at the correct age. A waiting period must pass before becoming eligible for benefits B) Exclusion \text { Service Revenue } & & 598,000 \\ C) A prorated death benefit based on the amount of insurance the insureds premiums would have been if purchased at the correct age D) The agents obligation to pay a death benefit upon an approved death claim, C) The insurers obligation to pay a death benefit upon an approved death claim. Instead, there are four options that the owner can choose from in order to access the accumulated cash value. Which military service exclusion clause would pay upon his death? C) collateral assignment e. Equipment. D) provide a valid reason for the lapse, B) provide evidence of insurability to the insurer. Set the qualitative parameters if the engine type is gasoline. a) A client with amyotrophic lateral sclerosis (ALS) tells the nurse, "Sometimes I feel so frustrated. The following are the payout options outlined in the nonforfeiture clause of a whole life insurance policy: If a policy owner chooses the cash surrender value option, the insurer will pay the remaining cash value within six months. You can learn more about the standards we follow in producing accurate, unbiased content in our. All of the following are considered to be nonforfeiture options The insurer will deduct the outstanding loan balance from the. A) Reinstatement His insurance policy continues in force without payment of further premiums. Which of these is an element of a Variable Life policy? When a policy is in force for a longer duration, the better the cash values and the nonforfeiture values. P purchases a $50,000 whole life insurance policy in 2005. N dies September 15. Elaine was diagnosed with a terminal illness. h. Supplies. A nonforfeiture clause is an insurance policy clause stipulating that an insured party can receive full or partial benefits or a partial refund of premiums after a lapse due to nonpayment. A Its premium steadily decreases over time, in response to its growing cash value. Eric purchased a cash value life insurance policy six years ago. a) A client with amyotrophic lateral sclerosis (ALS) tells the nurse, "Sometimes I feel so frustrated. What Is Charitable Gift of Life Insurance? B) incontestable period If thats the case, you dont have to worry anymore. B) Waiver of premium rider T took out a $50,000 life insurance policy with an Accidental Death and Dismemberment rider. Life Insurance Policies - Provisions, Options and Riders - 2 \text { Wages Expense } & 137,000 & \\ D) irrevocable assignment. In most cases, the surrender cash value may be different from the cash value due to the policy owner. B) policy and all sales material Work with our consultant to learn what to alter, Chapter 4- Policy Provisions, Options and Riders (Exam 2). D) accidental death. Learn how it works. Coverage can be added at specific ages, Evidence of insurability is required when the option is exercised. C) Accelerated death benefit How is a life insurance policy dividend legally defined? A) Policy In permanent life insurance, the policyholder will not lose the life insurance policy entirely. C) Ike will have a level premium The above question All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT, Was part of Insurance MCQs & Answers. Which of these features would limit the insurers obligation in the event N was killed while flying as a student pilot? Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. C) Return of premium provision Extended-term insurance allows a policyholderto stop paying the premiums, but not forfeit the equity of theirpolicy. What action can a policyowner take if an application for a bank loan requires collateral? c. What is your commission? Cash Required fields are marked *, All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT. When the term insurance expires, A) he has the option of resuming the original policy and paying the same premium What are collateral assignments normally associated with? C) policy and any verbal agreements Understanding your choices with a nonforfeiture clause can help you determine which option is best for your financial situation and goals, whether its an extended term policy, cash surrender value, or another option. A) Payment mode suicide. d) Alzheimer's disease While normally mental and nervous disorders or disease are excluded in long-term care policies, Alzheimer's disease is not. D) experiencing financial hardship. D) Beneficiary. If an insureds age on a life insurance policy has been misstated, what is the insurers liability if the insured dies? Past-due interest on a policy loan is added to the total debt James is the insured on a life insurance policy where his age was misstated on the application. Increased proceeds can be provided through accumulation of interest C) accelerated benefit rider A) The policy may be paid up early by using accumulated cash values ? A) Long-term care rider Which of these is NOT a type of agent authority? Diffusion Let us complete them for you. AILife.com. The action must be brought a) Within 2 years. All of the following are optional methods of settlement after the insured has died EXCEPT life income option. C) Dividends are always taxable Nonforfeiture Benefits for Life Insurance | Life Benefits Surrender Value: What's the Difference? A Medicare Supplement policy must provide coverage for pre-existing conditions after the policy has been in force for a) 1 year b) 2 years c) 90 days d) 6 months. D) Monthly income payments. B) Purchase additional coverage with no evidence of insurability required C) Paid-up additions Which dividend option would an insurer invest the policyowner's money and add any interest earnings as the dividends accrue? until after the adjusting entries are made? D) any surrender charges owed by the policyowner, B) past due premiums that have not been paid by the end of the grace period. A claimant wants to bring a recovery action against an insurance company for a loss claimed under a policy. \text { Accounts Receivable } & 15,900 & \\ Cash surrender value applies to the savings element of whole life insurance policies. When a misrepresentation on a life insurance policy application is discovered, what action may an insurance company take? How Cash Value Builds in a Life Insurance Policy, Payout Options Under a Nonforfeiture Clause, Paid-Up Additional Insurance: Definition and the Role of Dividends, Life Insurance: What It Is, How It Works, and How To Buy a Policy, Whole Life Insurance Definition: How It Works, With Examples, Policy Loan: Definition, How They Work, Benefits, and Downsides. B) Free-look period D) is injured in a skiing accident and dies 18 months later. James is the insured on a life insurance policy where his age was misstated on the application. A) Proof of insurability Which of these is NOT considered to be a nonforfeiture option in a whole life insurance policy? Which of the following is CORRECT regarding the death benefit amount? Recent Examples on the Web This relatively unknown nonforfeiture option is called a life settlement. Which type of life policy contains a monthly mortality charge as well as self-directed investment choices? D) Mike has the option of using his cash value to purchase a reduced amount of paid-up whole life insurance, D) Mike has the option of using his cash value to purchase a reduced amount of paid-up whole life insurance. D) cost of living rider. B) nonforfeiture option Which statement regarding the Misstatement of Age provision is considered to be true? Which of the questions would you be unlikely to ask when interviewing a real estate agent? However, during the early years of awhole life insurance policy, the savings portion brings little return compared to thepremiumspaid. C) Reduced paid-up insurance What Is a Nonforfeiture Clause? 4 Payout Options Explained - Investopedia If the consumer price index has gone up 4%, how much may Ron increase the face value of the policy? C) resubmit a new life insurance application Which of these is NOT a characteristic of the Accelerated Death Benefit option? Standard life insurance and long-term care insurance policies may have a nonforfeiture clause. C) Waivers He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem. All of the following are Nonforfeiture options EXCEPT: . Cash Surrender She is concerned, however, that if she becomes disabled she will be unable to pay the premiums as they come due. Past-due interest payments not paid after 3 months will void the policy D) grace period. A) dividend option B) settlement option C) nonforfeiture option D) interest-only option. P cannot assign ownership of the policy while premiums are being waived, Which of these are NOT an example of a Nonforfeiture option? Kurt is an active duty serviceman who was recently killed in an accident while home on leave. D) Grace period provision. C) all remaining cash values are paid to the policyowner d. What price range is your specialty? Which provision would keep the policy in force if S does not make the required payment and the policy has adequate cash value from which the premium payment can be made? B) Payor rider A) Martial status Such an option considers the saving component of the policy. policy has a decreased face amount A life insurance policyowner does NOT have the right to. A) Waiver B) past due premiums that have not been paid by the end of the grace period It stipulates that a policy owner will receive partial or full benefits or a refund of premium paid towards a whole life insurance policy if the policy lapses due to non-payment. A) Interest only Insurance companies can send delinquent interest accounts to a collection agency B) the policy would be payable only after the beneficiary makes past due premium payment D) Make a policy loan interest payment after the due date without any loss of coverage, B) Make a premium payment after the due date without any loss of coverage. S dies 1 year later of natural causes. The amount of cash value you will have built-in your policy will be reduced by the amount of any loans against your life insurance. Which of the following is the process of getting oxygen from the environment to the tissues of the body? C) One-year term What time period allows an insureds life insurance policy to remain in force even if the premium was not paid on the due date? Quickly and professionally. Chapter 3.2 - Subjecto.com One life insurance policy provision specifies that the insurer cannot deny payment to the beneficiary because of concealment or misrepresentation if the life insurance policy has been in force for two years during the insured's lifetime. This rider is called a(n), A) Guaranteed insurability rider One life insurance policy provision permits the policyholder to pledge certain rights in the life insurance policy to secure a loan. type of life insurance C) Accelerated rider A) Declarations We also reference original research from other reputable publishers where appropriate. Choosing the nonforfeiture extended term option allows the policy owner to use the cash value to purchase a term insurance policy with a death benefit equal to that of the original whole-life policy. A) Dividends are always guaranteed Pat owns a 20-pay life policy with a paid-up dividend option. 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 . C) are limited by the face amount of the policy Feel free to get in touch with us via email. Cookies collect information about your preferences and your devices and are used to make the site work as you expect it to, to understand how you interact with the site, and to show advertisements that are targeted to your interests. It is tax deductible Charitable gift of life insurance is a way of contributing to charity by taking out life insurance on yourself and naming a charity as a beneficiary. The death benefit would be equal to the benefit in the original whole life insurance policy. \text { Accounts Payable } & & 9,400 \\ C) The insurers obligation to pay a death benefit upon an approved death claim The common disaster provision states the insurer will continue as if, A) the insured outlived the beneficiary The Structured Query Language (SQL) comprises several different data types that allow it to store different types of information What is Structured Query Language (SQL)? D) Grace period. Chapter 4- Policy Provisions, Options and Riders (Exam 2) Also, the amount of reduced paid-up or extended-term insurance may decrease if a policys sub-account performance is poor or credited interest rates are low. reduced paid-up insurance. Insured must be totally disabled to qualify, Insured must be eligible for Social Security disability for claim to be accepted. The interest credited under this option is TAXABLE, whether or not the policyowner receives it. When assessing a client with partial-thickness burns over 60% of the body, which finding should the nurse report immediately? Insurance Exam Review Questions Flashcards | Chegg.com Extended Term Reduced Paid-up Cash Surrender Life Income. B) 1/2 of the policys face amount Coverage will be adjusted to reflect the insureds true age if a misstatement of age is discovered. Financial Modeling & Valuation Analyst (FMVA), Commercial Banking & Credit Analyst (CBCA), Capital Markets & Securities Analyst (CMSA), Certified Business Intelligence & Data Analyst (BIDA), Financial Planning & Wealth Management (FPWM). B) pilot of personal airplane All of the following are Nonforfeiture options EXCEPT a) Reduced paid-up b) Interest only c) Cash surrender d) Extended term b) Interest only Nonforfeiture values include cash surrender, extended term and reduced paid-up. Extended-term insurance is often thedefault non-forfeiture option. Waiver of Premium is available on both permanent and term insurance policies A) Incontestable period a The premiums on their policy will never increase. In 2010, P takes up scuba diving and dies in a scuba-related accident in 2011. a. Life Policy, Riders and OptionsQ1 Quiz - Quizizz D) war. B) Age These options include: If the policyholder does not choose any of the above options after the policy is terminated or surrendered, the insurance company will go for the payout option stipulated in the life insurance policy of the owner. How much will Ds beneficiarys receive? D) Accelerated death benefit, Barbaras policy includes a rider which allows her to purchase additional insurance at specific dates or events without evidence of insurability. The clause may involve returning some portion of the total premiums paid, the cash surrender value of the policy, or a reduced benefit based upon premiumspaid beforethe policy lapses. Policy loans may still be made Sometimes, a policy expires after a so-called grace period. A) Contest the terms of the policy after the issue date Set the qualitative variable to 0 if the engine type is a diesel. A) Entire contract provision Are you having trouble answering the question All of the following are nonforfeiture options, EXCEPT:? B) Waiver of Premium An insurer can be protected from adverse selection with which policy provision? A) Reduction of premium dividend option Fixed Amount How are policyowner dividends treated in regards to income tax? D) buy additional insurance coverage, All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT, A) Extended Term Insurance revoke an absolute assignment B) dies of a stroke C) automatic premium loan rider Must have a terminal illness to qualify. An insurer will accept a premium from the insured and continue the coverage in full force as though it was NOT late during which time period? C) Insuring clause Pay face amount minus the past due premium. When assessing a client with partial-thickness burns over 60% of the body, which finding should the nurse report immediately? C) Reinstatement period Diffusion Let us complete them for you. E and F are business partners. B) Face amount of the new policy equals that of the original policy What is an insurer required to do when faced with an error made under the Misstatement of Age provision? If Ron goes to a doctor who is not a PPO provider, what will happen? Their purpose is to protect the insured's accumulated cash values in case the Whole Life or Endowment policy lapses. Claims are denied under the Suicide clause of the policy, Which of these statements about a Guaranteed Insurability Option rider is NOT TRUE? In a life insurance policy, which feature states that the policy will not cover certain risks? P died five years after purchasing a life policy. When is the face amount of a Whole Life policy paid? C) transferable assignment the benefit can be offered as a rider at a specific extra cost or may be at no cost. In personum actions are against the owner of property, whereas in rem actions are taken . Refer to the earlier problem. Your email address will not be published. A provision that allows a policyowner to temporarily give up ownership rights to secure a loan is called a Pat owns a 20-pay life policy with a paid-up dividend option. See the bus stats for the Lincolnville School District. All of the following life insurance policies develop a cash value EXCEPT term life insurance. The nonforfeiture benefits clause allows the owner to choose full benefits or partial benefits when the premium can no longer be paid starting after a certain number of years. "What Are Life Insurance Non-Forfeiture Options? B) absolute assignment The treatment is expensive and is not covered by Elaine's health insurance. B) Juvenile waiver b. While investigating the claim, the insurer discovered material misrepresentations made by P during the application process. The cash surrender value will also be reduced by any outstanding loan amount. Which military service exclusion clause would pay upon his death? If D dies without making any further changes, to whom will the policy proceeds be paid to? How much do I qualify to borrow? The insured partys coverage can be terminated automatically when the policyholder fails to make premium payments or when he/she surrenders the policy. A policy loan is made possible by which of these life insurance policy features? c) Reducation of Premium If cash has accumulated in the policy, state law forbids companies from keeping it and cancelling the policy. What does the insuring agreement in a Life insurance contract establish? D) during the last 6 months, C) minus indebtedness and without interest. B) accumulate without interest Investopedia requires writers to use primary sources to support their work. Insurance companies can charge an interest rate based on the policyowners credit report, Past-due interest on a policy loan is added to the total debt. Which type of rider will waive the premium on a childs life insurance policy if the parent paying the premium dies? All of the following are standard life insurance policy nonforfeiture options EXCEPT: (A) cash surrender option(B) 1-year term insurance option(C) extended term insurance option(D) reduced paid-up (permanent) insurance option A (B) 1-year term insurance option 6 Q Which of the following statements best describes life insurance policy dividends? He forgot to pay the premium that was due last week. B) It allows for policy loans to be advanced to the insured in the event of unemployment the death benefit paid will be what the premium would have purchased at the correct age. B) Insured becomes totally disabled Which of these actions is taken when a policyowner uses a Life Insurance policy as collateral for a bank loan? 609.5315. C) Extended term insurance B) Nonforfeiture 90 percent of forfeiture proceeds go to law enforcement, Law enforcement required to report forfeitures to the state auditor on a monthly basis, and the auditor must then make annual reports to the state Legislature. Whole life insurance is permanent life insurance that pays a benefit upon the death of the insured and is characterized by level premiums and a savings component. Which of the following statements is (are) true regarding life insurance policyowner dividends? Marguerita is a Certified Financial Planner (CFP), Chartered Retirement Planning Counselor (CRPC), Retirement Income Certified Professional (RICP), and a Chartered Socially Responsible Investing Counselor (CSRIC). Which of the following statements is (are) true regarding life insurance policyholder dividends? Extended Term Of the following dividend options, which of these is taxable? B) payor provision Chapter 3 - Life Policy provisions, riders, and option - Chegg For an individual who is NOT covered by an employer-sponsored plan, IRA contributions are 1. Which of these require an offer, acceptance, and consideration? C) take out a policy loan Which of the following is a restatement condition? P cannot borrow against the policys cash value while disabled D) Insured has become terminally ill. How do life insurance companies handle cases where the insured commits suicide within the contracts stated Contestable period? Life insurance policyholders can select one of four nonforfeiture benefit options: the cash surrender value, extended term insurance, loan value, and paid-up insurance.