All of these would be factors that determine how much coverage can be purchased EXCEPT Depending on the age of the policy, the cash surrender value could be less than theactual cash value. C) are limited by the face amount of the policy B) Policy exclusion Which of the following provisions guarantees that premiums will be waived if a Juvenile Life policyowner becomes disabled? D) Cash dividend option. \text { Accounts Payable } & & 9,400 \\ Which type of life policy contains a monthly mortality charge as well as self-directed investment choices? Which policy provision protects the policyowner from unintentional lapse of the contract? C) Rider A life insurance policy which ensures that the premium will be paid if the insured becomes disabled has what kind of rider attached? Cash Value vs. C) There may be a dollar limit on the maximum benefit C) Accidental Death Rider C) One-year term Policyholders can choose to access the policy's cash value through cash . A) The face amount and policy premium are not affected by the payment What action can a policyowner take if an application for a bank loan requires collateral? C) Dividends are always taxable Recent Examples on the Web This relatively unknown nonforfeiture option is called a life settlement. B) the right to contest the terms of the policy We also reference original research from other reputable publishers where appropriate. C) Allows for a full refund after policy delivery B) The full original death benefit listed on the policy Full face amount minus any past due premiums. Diffusion Let us complete them for you. D) Beneficiary. Also, any outstanding amounts on the insured partys coverage are deducted from the cash value. Forfeiture (law) - Wikipedia Which of the following areas do errors commonly occur on applications and for which the incontestable clause does NOT apply? The nonforfeiture benefit is designed to ensure that if you lapse your policy (i.e., stop paying premiums) after a specified number of years, you retain some benefits from the policy. \textbf{Rogers Coproration}\\ B) guaranteed insurability rider D) interest-only option. D) Allows the insured to convert a term life policy to whole life with no evidence of insurability, B) Purchase additional coverage with no evidence of insurability required, Loans obtained by a policyowner against the cash value of a life insurance policy, A) are treated as taxable income Exam Review #1 Flashcards | Chegg.com Evidence of insurability is not required when the option is exercised B) It allows for policy loans to be advanced to the insured in the event of unemployment D) war, An insured individual and the policys beneficiary die from the same accident. B) One year term Each brother purchases a life policy that has a $750 annual premium. $100,000, L takes out a life insurance policy and dies 10 years later. CFI is the official provider of the global Commercial Banking & Credit Analyst (CBCA) certification program, designed to help anyone become a world-class financial analyst. Universal life (UL) insurance is permanent life insurance with an investment savings component. Standard life insurance and long-term care insurance policies may have a nonforfeiture clause. The remaining cash value may be used to purchase an annuity free of commissions or expenses. T took out a $50,000 life insurance policy with an Accidental Death and Dismemberment rider. B) The insurer withholds the cost basis Meanwhile, theequity you built is used to purchase a term policy that equals the number of years you paid premiums. Elaine was diagnosed with a terminal illness. D) A return of excess premium subject to capital gains tax, C) A return of excess premium and not taxable, All of the following riders can increase the death benefit amount EXCEPT, A) Cost of Living d) Reduced Paid-Up Insurance. A counselor receives a fee for advice, and can maintain a dual license as an agent and counselor. B) Decreases the policys cash value Past-due interest on a policy loan is added to the total debt Discover your next role with the interactive map. Interest only is a settlement option. Eric purchased a cash value life insurance policy six years ago. B) Make a premium payment after the due date without any loss of coverage B) the beneficiary outlived the insured A) Martial status Refer to the earlier problem. D) Conditions. 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 non-payment. revoke an absolute assignment A policy loan is issued by an insurance company and uses the cash value of a life insurance policy as collateral. 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. h. Supplies. Sometimes, a policy expires after a so-called grace period. 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. D) Monthly income payments. C) collateral assignment Reduced Paid-Up What is the Suicide provision designed to do? Mike buys a 10-year renewable term policy. A) The original face amount will be paid to the beneficiary Which of the following is CORRECT regarding the death benefit amount? Chapter 3.2 - Subjecto.com Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it? All of the following are optional methods of settlement after the insured has died EXCEPT. A young, married teacher has two children and owns a Whole Life policy. D) Life income annuity. B) payor provision C) dies instantly from a car accident Cash surrender value applies to the savings element of whole life insurance policies payable before death. A) Entire contract period Which of the following is a restatement condition? reduced paid-up insurance. B) waiver of premium b) The key employee has premiums deducted from his salary. D) The benefit can be offered as a rider at a specific extra cost or may be at no cost, D) The benefit can be offered as a rider at a specific extra cost or may be at no cost. She died January 10 without making the premium payment. \text { Other Assets } & 60,900 & \\ 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. D) Period of time after the premium is due but the policy remains in force, D) Period of time after the premium is due but the policy remains in force, All of these are common exclusions to a life insurance policy EXCEPT, A) accidental death His $100,000 Whole life policy contains a War Exclusion clause. She can reestablish coverage under which of the following provisions? Which of these is NOT a type of agent authority? b) Cash Surrender 350 Flashcards | Chegg.com \text { Note Payable (due 2022) } & & 50,000 \\ If the consumer price index has gone up 4%, how much may Ron increase the face value of the policy? D) Family income rider. However, when the policy is terminated or the owner surrenders the policy, the death benefit ceases to exist. 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. The policy is then issued with no scuba exclusions. Inability of the insured to perform more than 2 Activities of Daily Living (ADLs), The Accidental Death and Dismemberment (AD&D) provision in a life insurance policy would pay additional benefits if the insured. war. Life insurance is a contract in which an insurer, in exchange for a premium, guarantees payment to an insureds beneficiaries when the insured dies. Permanent life insurance, long-term disability, and long-term care insurance policies may have nonforfeiture clauses. The goal of a life insurance policy is to protect the surviving dependents of the policyholder such that, after the death of the insured person, the insurance company pays a specific sum to the named beneficiaries. All of the following are true of Key Employee life insurance EXCEPT a) The death benefit is free from income taxes. d) Revocable Revocable beneficiares can be changed at any point. D) The original death benefit listed on the policy minus any outstanding loans and interest, C) A prorated death benefit based on the amount of insurance the insureds premiums would have been if purchased at the correct age. Quickly and professionally. D) Automatic premium loans, The automatic premium loan provision authorizes an insurer to withdraw from a policys cash value the amount of, A) any interest payable from an outstanding policy loan balance Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. A) Contest the terms of the policy after the issue date All of the following are Nonforfeiture Options EXCEPT Accounting MCQs B) Reinstatement provision Investopedia requires writers to use primary sources to support their work. B) Application One life insurance policy provision permits the policyholder to pledge certain rights in the life insurance policy to secure a loan. Nonforfeiture Definition & Meaning - Merriam-Webster Which of the following is the process of getting oxygen from the environment to the tissues of the body? B) Juvenile waiver If the consumer price index has gone up 4%, how much may Ron increase the face value of the policy? How are surrender charges deducted in a life policy with a rear-end loaded provision? A sub-agent cannot take or sign an application. The policyis calculatedfrom the insureds attained age. D) Nonforfeiture options. C) automatic premium loan How do life insurance companies handle cases where the insured commits suicide within the contracts stated Contestable period? B) Ike may eventually take out a policy loan 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 NOT a common life insurance policy rider? Evidence of insurability is required when the option is exercised How are policyowner dividends treated in regards to income tax? It is tax deductible D) Cash surrender. The option that provides an additional death benefit for a limited amount of time at the lowest possible cost is called a(n), Accidental Death and Dismemberment rider (AD&D). B) The insurers obligation to return all premiums upon an approved death claim One life insurance policy provision specifies that - Course Hero C) Waivers Chapter 4- Policy Provisions, Options and Riders (Exam 2) E and F are business partners. After reading about the changes in the government's role in the economy, write a one-page essay arguing whether you think those changes are helpful or harmful to the U.S. economy. P is the insured on a participating life policy. B) dies of a stroke Which of the questions would you be unlikely to ask when interviewing a real estate agent? A physical inventory shows that$650 of office supplies is on hand. Waiver of Premium If a policy owner has continually made premium payments for a sufficient amount of time, a forfeiture clause might become active in one of two ways. C) Ike will have a level premium b) Within 3 years. 9 Q What kind of policy does NOT typically require proof of insurability? D) Grace period. Which dividend option would an insurer invest the policyowners money and add any interest earnings as the dividends accrue? Both are in excellent health. His insurance policy continues in force without payment of further premiums. An insured is past due on his life insurance premium, but is still within the Grace Period. Which of these require an offer, acceptance, and consideration? . Before issuing payment to the policy owner, outstanding loan amounts are satisfied with the cash value. 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? The insured partys coverage can be terminated automatically when the policyholder fails to make premium payments or when he/she surrenders the policy. Insured must be eligible for Social Security disability for claim to be accepted The insurer will deduct the outstanding loan balance from the.
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