PF - Chapter 10, Objectives 3 & 4

Wendy has had a life insurance policy for five years with her spouse listed as the person who receives the benefit if she dies. She was recently divorced. Which of the following provisions should she take action on?

• Incontestability clause

• Misstatement of age provision

• Naming a beneficiary

• Policy reinstatement

• The grace period

Which of the following provisions requires the policyholder to again qualify as an acceptable risk and pay overdue premiums with interest in order to put a lapsed policy back in force?

• Incontestability clause

• Misstatement of age provision

• Naming a beneficiary

• Policy reinstatement

• The grace period

Georgia was supposed to pay her premium by the 15^th of the month. Which of the following provisions allows her to keep her coverage if she is a couple of weeks late with paying her premium (without penalty)?

• Incontestability clause

• Misstatement of age provision

• Naming a beneficiary

• Policy reinstatement

• The grace period

Fred bought life insurance five years ago. He forgot to tell them that he had a heart condition, and, as a result of that condition, he recently died. Which of the following provisions prevents the life insurance company from refusing to pay his beneficiaries because of his original fraudulent misrepresentation?

• Incontestability clause

• Misstatement of age provision

• Naming a beneficiary

• Policy reinstatement

• The grace period

The policy loan provision means that

• An individual can take out a loan on his or her term policy.

• The death benefit will be increased by the amount of an outstanding policy loan.

• The policy owner can borrow any amount up to the cash value of the policy.

• The beneficiary can borrow any amount up to the total benefit.

• No interest will accumulate for any loans related to life insurance.

Bill is worried about being able to pay his premium if he is totally and permanently disabled before age 60. Which of the following riders should he consider?

• Waiver of premium disability benefit

• Accidental death benefit

• Guaranteed insurability option

• Cost-of-living protection

• Accelerated benefits

Mildred was diagnosed with terminal cancer and knows that she doesn't have long to live. Which of the following riders would allow her to receive cash now?

• Waiver of premium disability benefit

• Accidental death benefit

• Guaranteed insurability option

• Cost-of-living protection

• Accelerated benefits

All of the following are major rating agencies for insurance except

• A.M. Best.

• Dun & Bradstreet.

• Moody's.

• Standard & Poor's.

• Weiss Research.

After you purchase a life insurance contract, you have a "free look" period that lasts

• 3 days.

• 5 days.

• 10 days.

• 30 days.

• 60 days.

The settlement option that pays the life insurance proceeds in equal periodic installments for a specified number of years after your death is called

• Lump-sum payment.

• Limited installment payment.

• Final life payment.

• Life income option.

• Proceeds left with the company.