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Professional Development
Professional Development
Life Policy, Riders and Options...Q1
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- 1. Multiple Choice
Which provision of a life insurance policy states that the application is part of the contract?
Insuring clause
Ownership
Entire contract
Assignment
- 2. Multiple Choice
Which of the following best describes fixed-period settlement option?
Only the principal amount will be paid out within a specified period of time.
The death benefit must be paid out in a lump sum within a certain time period.
Income is guaranteed for the life of the beneficiary.
Both the principal and interest will be liquidated over a selected period of time.
- 3. Multiple Choice
All of the following are dividend options EXCEPT
Paid-up additions.
Fixed-period installments
Accumulated at interest
Reduction of premium
- 4. Multiple Choice
Which nonforfeiture option has the highest amount of insurance protection?
Conversion
Decreasing Term
Reduced paid-up
Extended Term
- 5. Multiple Choice
An insured committed suicide one year after his life insurance policy was issued. The insurer will
Pay the policy's cash value.
Pay the full death benefit to the beneficiary.
Pay nothing.
Refund the premiums paid.
- 6. Multiple Choice
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?
One-year term
Reduction of premium
Accumulation at interest
Paid-up option
- 7. Multiple Choice
Under an extended term nonforfeiture option, the policy cash value is converted to
A higher face amount than the whole life policy.
The same face amount as in the whole life policy.
The face amount equal to the cash value.
A lower face amount than the whole life policy.
- 8. Multiple Choice
An insured receives an annual life insurance dividend check. What term best describes this arrangement?
Cash option
Reduction of premium
Annual dividend Provision
Accumulation at interest
- 9. Multiple Choice
If a life policy allows a policy owner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a
Guaranteed insurability rider.
Paid-up additions option.
Cost of living provision.
Nonforfeiture Option.
- 10. Multiple Choice
Which of the following determines the length of time that benefits will be received under the Fixed-Amount settlement option?
Amount of interest
Size of each installment
Predetermined length of time stated in the contract
Length of income period
- 11. Multiple Choice
Who can request changes in premium payments, face value, loans, and policy plans?
Producer
Policy owner
Contingent beneficiary
Beneficiary
- 12. Multiple Choice
Which of the following policy components contains the company's promise to pay?
Premium mode
Owner's rights
Entire contract provision
Insuring clause
- 13. Multiple Choice
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?
Medical exam and parents medical history
Proof of insurability is not required
Medical exam
Her parents' federal income tax receipts
- 14. Multiple Choice
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
Acceptance.
Consideration.
Conditions.
Utmost good faith.
- 15. Multiple Choice
All of the following are TRUE statements regarding the accumulation at interest option EXCEPT
The interest is credited at a rate specified by the policy.
The policy holder has the right to withdraw the accumulations at any time.
The interest is not taxable since it remains inside the insurance policy.
The annual dividend is retained by the company.
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