WorksheetsStandard Life Insurance Provisions Ch 5 Quiz
Total questions: 30
Worksheet time: 15mins
What is the purpose of the entire contract clause in a life insurance policy?
To allow changes to the policy coverage
To specify the premium payment schedule
To be found at the beginning of the policy
To outline the company's promise to pay benefits
Which clause allows the insurer to contest a claim during the contestable period?
Owner’s Provision
Incontestable clause
Execution clause
Privilege of change clause
What does the insuring clause specify?
The conditions for policy changes
The company's promise to pay benefits upon death
The rights of the policy owner
The incontestable period
What is the primary advantage of a policy loan?
It provides ready cash without needing to apply or qualify
It allows for a change in policy beneficiaries
It extends the term of the policy
It reduces the premium payments
What does the automatic premium loan provision do?
Allows the policy owner to change the premium payment schedule
Automatically takes a loan against the policy’s cash value to pay the premium
Provides a full premium refund if the policy is returned
Allows the policy owner to select the mode of premium
What is the purpose of the free-look provision?
To protect the policy owner against unintentional lapse
To outline the rights of the policy owner
To specify the conditions for policy changes
To allow the policy owner to return the policy for a full premium refund
What does the grace period in a life insurance policy protect against?
Contestability of claims
Changes in policy coverage
Unintentional lapse of the policy
Misstatement of age
What is the reinstatement period in a life insurance policy?
The time allowed to return the policy for a refund
The period during which the policy owner can change beneficiaries
The period during which the insurer can contest a claim
The time allowed to reinstate a lapsed policy
What is the cost recovery rule related to?
The right to change the policy’s beneficiaries
Tax exemption of the cost basis when a policy is surrendered
The ability to convert a term policy
The exclusion of suicide during the initial period
What is the primary advantage of the extended term insurance option?
It allows for a change in premium payment schedule
It allows for a change in policy ownership
It provides the most life insurance protection upon policy surrender
It provides a full premium refund
What does the spendthrift clause protect?
The monies left on account with the insurer from creditors
The right to assign ownership of the policy
The policy owner’s right to change beneficiaries
The right to convert a term policy
What is the purpose of the accelerated benefits provision?
To allow a policy owner to accelerate the death benefit under certain conditions
To provide catastrophic illness coverage
To allow for a change in premium payment schedule
To protect against unintentional lapse
What does the long-term care rider generally pay benefits for?
When the insured cannot perform at least two activities of daily living
When the insured is diagnosed with a terminal illness
When the policy is surrendered for its cash value
When the policy owner changes the premium payment schedule
What is an insurance dividend considered?
A premium refund
A guaranteed payment
Non-taxable income
Taxable income
What is a unique feature of a life insurance contract?
The ability to change the policy’s beneficiaries
The ability to contest claims at any time
The ability to change the premium payment schedule
The ability to customize the policy through riders
What does the waiver of cost of insurance rider do?
Waives monthly deductions for universal whole life policies
Waives the right to change beneficiaries
Waives the incontestable period
Waives the premium payments for a specified period
What is the purpose of the disability income benefit rider?
To protect against unintentional lapse
To allow for a change in premium payment schedule
To provide catastrophic illness coverage
To provide an income benefit if the insured is totally and permanently disabled
What is the principal sum in accidental death coverage?
The amount paid for long-term care
The amount paid for accidental dismemberment
The amount paid for catastrophic illness
The death benefit paid under accidental death coverage
What is the capital sum in accidental dismemberment?
The amount paid for catastrophic illness
Generally one-half of the principal sum
The amount paid for long-term care
The amount paid for accidental death
What does the guaranteed insurability option allow?
Purchase of additional life insurance without evidence of insurability
Change of policy beneficiaries
Reinstatement of a lapsed policy
Conversion of a term policy
What is the payor rider added to?
A policy with catastrophic illness coverage
A policy covering the life of an adult
A policy covering the life of a child
A policy with a long-term care rider
What does a level term rider add?
An additional fixed, level death benefit for a predetermined period
An additional decreasing death benefit for a predetermined period
An additional increasing death benefit for a predetermined period
An additional catastrophic illness coverage
What does a decreasing term rider add?
An additional increasing death benefit for a predetermined period
An additional decreasing death benefit for a predetermined period
An additional fixed, level death benefit for a predetermined period
An additional catastrophic illness coverage
What does an increasing term rider provide?
An additional fixed, level death benefit
An additional term insurance face amount at death
An additional catastrophic illness coverage
An additional decreasing death benefit
What does the cost of living rider do?
Provides catastrophic illness coverage
Provides long-term care benefits
Increases the face amount of the policy based on the Consumer Price Index
Decreases the face amount of the policy based on the Consumer Price Index
What is the purpose of additional insured riders?
To provide term insurance coverage for a spouse, children, or an entire family
To provide catastrophic illness coverage
To provide long-term care benefits
To provide accidental death coverage
What does the exchange privilege rider outline?
The conditions for converting a term policy
The conditions for changing the premium payment schedule
The conditions for changing the policy beneficiaries
The conditions for changing the insured of an insurance policy
What does the war exclusion prevent?
Coverage during long-term care
Coverage during catastrophic illness
Coverage during high-risk aviation activities
Coverage during military activities
What does the status war clause state?
The insured will possess coverage during high-risk aviation activities
The insured will not possess coverage while in the military
The insured will possess coverage during catastrophic illness
The insured will possess coverage during military activities
What does the results clause state?
Coverage if the insured dies during military activities
No coverage if the insured dies during military activities
Coverage if the insured dies during catastrophic illness
Coverage if the insured dies during high-risk aviation activities
