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- 1. Multiple Choice
What is the waiting period on a Waiver of Premium rider in life insurance policies?
30 days
3 months
5 months
6 months
- 2. Multiple Choice
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?
Insuring clause
Entire contract clause
Beneficiary clause
Consideration clause
- 3. Multiple Choice
All of the following are TRUE regarding insurance policy loans EXCEPT
Policy loans can be made on policies that do not accumulate cash value
The amount of the outstanding loan and interest will be deducted from the policy proceeds when the insured dies.
The policy will terminate if the loan plus interest equals or exceeds the cash value of the policy.
Policy owners can borrow up to the full amount of their whole life policy's cash value.
- 4. Multiple Choice
What required provision protects against unintentional lapse of the policy?
Reinstatement
Grace period
Assignment
Payment of premiums
- 5. Multiple Choice
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?
$20,000
$25,000
$50,000
The face amount will be determined by the insurer.
- 6. Multiple Choice
The type of settlement option which pays throughout the lifetimes of two or more beneficiaries is called
Joint and survivor.
Fixed period.
Fixed amount.
Joint life.
- 7. Multiple Choice
Under which of the following circumstances would an insurer pay accelerated benefits?
A couple is nearing retirement and needs a steady stream of income.
An insured is looking for a way to put her daughter through college.
A couple wants to build a house and would like to make a larger down payment.
An insured is diagnosed with cancer and needs help paying for her medical treatment.
- 8. Multiple Choice
If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10yrs before being exhausted, what settlement option should the beneficiary select?
Interest only
Fixed period
Life with period certain
Fixed amount
- 9. Multiple Choice
Which of the following, when attached to a permanent life insurance policy, allows the policy owner 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?
Term rider
Accidental death and dismemberment rider
Guaranteed insurability rider
Change of insured rider
- 10. Multiple Choice
Which of the following statements is TRUE concerning the Accidental Death Rider?
This rider is only available to insureds over the age of 65.
It is only available in group insurance.
It will pay double or triple the face amount.
It is also known as triple indemnity rider.
- 11. Multiple Choice
Nonforfeiture values guarantee which of the following for the policy owner?
That the death benefit will be paid in a lump sum.
That the policy premiums will never increase.
That the cash value will not be lost.
That the dividends will be paid annually.
- 12. Multiple Choice
Which of the following riders is often used in business life insurance policies when the policy owner needs to change the insured under the policy?
Guaranteed insurability rider
Payor benefit rider
Substitute insured rider
Term rider.
- 13. Multiple Choice
The paid-up addition option uses the dividend
To reduce the next year's premium.
To accumulate additional savings for retirement.
To purchase a smaller amount of the same type of insurance as the original policy.
To purchase a one-year term insurance in the amount of the cash value.
- 14. Multiple Choice
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
Projected interest rates.
Face amount of the policy.
The insured's age at death.
The beneficiary's life expectancy.
- 15. Multiple Choice
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?
$0
$200
$9,800
$10,000
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