Ch. 3: Policy Riders, Provisions, Options and Exclusions

An insured purchased a 15-year level term life insurance policy with a face amount of $100,000. The policy contained an accidental death rider, offering a double indemnity benefit. The insured was severely injured in an auto accident, and after 10 weeks of hospitalization, died from the injuries. What amount would his beneficiary receive as a settlement?

• $0

• $100,000

• $200,000

• $100,000 plus the total of paid premiums

Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member?

• Children's rider

• Additional insured rider

• Family term rider

• Spouse rider

Which is true about a spouse term rider?

• The rider is decreasing term insurance.

• Coverage is allowed up to age 75.

• The rider is usually level term insurance.

• Coverage is allowed for an unlimited time.

A policy owner fails to pay the premium due on his whole life policy after the grace period passes, but the policy remains in force. This is due to what provision?

• Assignment

• Automatic premium loan

• Waiver of premium

• Incontestability period

The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called

• Waiver of premium.

• Guaranteed insurability.

• Waiver of cost of insurance.

• Payor benefit.

A father purchases a life insurance policy on his teenage daughter and adds the Payor Benefit rider. In which of the following scenarios will the rider waive the payment of premium?

• If the father is disabled for at least a year

• If the daughter is disabled for more than 3 months

• If the daughter is disabled for any length of time

• If the father is disabled for more than 6 months

Which of the following statements is TRUE about a policy assignment?

• It authorizes an agent to modify the policy.

• It transfers rights of ownership from the owner to another person.

• It is the same as a beneficiary designation.

• It permits the beneficiary to designate the person to receive the benefits.

What required provision protects against unintentional lapse of the policy?

• Reinstatement

• Grace period

• Assignment

• Payment of premiums

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

What is the waiting period on a Waiver of Premium rider in life insurance policies?

• 30 days

• 3 months

• 5 months

• 6 months