Reduced Paid-Up D and his wife divorce and D remarries, transferring ownership of his policy to his new wife. \text { Service Revenue } & & 598,000 \\ Interest for the period All of the following are dividend options EXCEPT: Fixed-period installments. a. Prepaid Rent. A) Cash surrender D) the insured and beneficiary died at the same time. B) the beneficiary outlived the insured The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain . 2003-2023 Chegg Inc. All rights reserved. Mississippi. f. Six months interest at 8% on the note was paid on September 30. Required fields are marked *, All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT. A physical inventory shows that$650 of office supplies is on hand. reduction of premium Which situation accurately describes a reduced paid-up nonforfeiture option? Deducted based on the income level. Which provision prevents an insurer from changing the terms of the contract with the policyowner by referring to documents not found within the policy itself? Insurance Exam Review Questions Flashcards | Chegg.com A policyowner may exercise which of these dividend options that uses the dividend to pay all or part of the next premium due? A) Net death benefit will be reduced if the loan is not repaid The remaining cash value may be used to purchase an annuity free of commissions or expenses. All of the following statements are true EXCEPT, A) Mikes policy will develop no cash value over the policys term D) Cash surrender. N dies September 15. D) Premium decrease. What is the Suicide provision designed to do? This provision is the, All of the following are nonforfeiture options EXCEPT. Why would you not want to prepare financial statements b) Cash Surrender C) Provides for the early payment of some portion of the policy face amount should be insured suffer from a terminal illness C) Incontestability Evidence of insurability is required when the option is exercised In a reduced paid-up insurance option, the policy owner receives a lower amount of payments made as premiums for the original whole life insurance. B) Free-look period Interest only is a settlement option. C) aviation Coverage can be added at specific events such as marriage or having a child A claimant wants to bring a recovery action against an insurance company for a loss claimed under a policy. C) The insurers obligation to pay a death benefit upon an approved death claim Irrevocable beneficiaries must give permission to the policyowner in order for the beneficiary to be changed. B) aviation D) hazardous jobs, A provision in a whole life policy that allows a policyowner to terminate the policy in return for a reduced paid-up policy of the same type is called a(n), A) insuring clause Feel free to get in touch with us via email. Never tax deductible. \text { Totals } & \underline{\underline{\$ 1,089,100}} & \underline{\underline{\$ 1,089,100}} Which statement regarding the Misstatement of Age provision is considered to be true? C) It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill Which policy provision protects the policyowner from unintentional lapse of the contract? M had an annual life insurance premium payment due January 1. The meaning of NONFORFEITURE is failure or refusal to forfeit something often used before another noun. How do life insurance companies handle cases where the insured commits suicide within the contracts stated Contestable period? During the claim process, the insurer discovers that L had understated her age on the application. B) 1/2 of the policys face amount 3. The policy starts generating returns by the third year, and part of the revenue goes to policy reserve, while the remaining revenue goes to cover administrative costs, agent commissions, and acquisition costs. $50,000 minus any outstanding policy loans. Universal life (UL) insurance is permanent life insurance with an investment savings component. d. Accumulated Depreciation-Equipment. In most cases, the surrender cash value may be different from the cash value due to the policy owner. When the term insurance expires, A) he has the option of resuming the original policy and paying the same premium D) war. One life insurance policy provision specifies that the insurer cannot deny payment to the beneficiary because of concealment or misrepresentation if the life insurance policy has been in force for two years during the insured's lifetime. Under the Misstatement of Age provision, the insurer will, adjust the death benefit to a reduced amount, The incontestable clause allows an insurer to, contest a claim during the contestable period. If the consumer price index has gone up 4%, how much may Ron increase the face value of the policy? Past-due interest payments not paid after 3 months will void the policy C) Entire Contract It is taxed as capital gains C) accelerated benefit rider How Cash Value Builds in a Life Insurance Policy, Payout Options Under a Nonforfeiture Clause, Paid-Up Additional Insurance: Definition and the Role of Dividends, Life Insurance: What It Is, How It Works, and How To Buy a Policy, Whole Life Insurance Definition: How It Works, With Examples, Policy Loan: Definition, How They Work, Benefits, and Downsides. 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? Which of these describe a participating life insurance policy? A) The policy may be paid up early by using accumulated cash values B) Ike may eventually take out a policy loan One life insurance policy provision permits the policyholder to pledge certain rights in the life insurance policy to secure a loan. Eric purchased a cash value life insurance policy six years ago. A life insurance policy normally contains a provision that restricts coverage in the event of death under all of the following situations EXCEPT. Which of these is NOT a characteristic of the Accelerated Death Benefit option? Indicate whether each of the following items is a real or nominal account and whether it appears in the balance sheet or the income statement. B) $800 C) Address Life Income, All of the following statements are true regarding a policys Grace period EXCEPT Unpaid interest will be added to your loan amount and will be subject to compounding. Which provision will pay a portion of the death benefit prior to the insureds death due to a serious illness? Which policy provision is responsible for this? Cash surrender value is the accumulated portion of a permanent life insurance policy's cash value that is available to the policyholder upon surrender of the policy. Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it? Plot the fitted values on the horizontal axis and the residuals on the vertical axis. Which of these is considered to be a Living Benefit option in a life insurance policy? Reduced Paid-up B) No interest will be charged on loan balance Consider consulting a financial advisor who can guide you on choosing an option that will best fit your circumstances. D) Full face amount. B) incontestable period Which of the following statements is true? D) Bill the policyowner for back premiums. The policy value, therefore, should reflect the effects of inflation upon the economy. C) waiver of premium B) policy and all sales material Which rider would pay a monthly amount because of this disability? Quickly and professionally. When is the face amount of a Whole Life policy paid? Extended Term Discover your next role with the interactive map. Loans obtained by a policyowner against the cash value of a life insurance policy A whole life policy option where extended term insurance is selected is called a. Who the policyowner is and what rights the policyowner is entitled to. C) resubmit a new life insurance application c) The business is the owner and beneficiary of the policy. C) $2,000 a) Conversion b) Decreasing Term c) Reduced Paid-up d) Extended Term. B) Make a premium payment after the due date without any loss of coverage d) The key employee is the insured. J let her life insurance policy lapse 8 months ago due to nonpayment. B) Waiver of premium rider D) Cash dividend option. There are currently two common types of nonforfeiture benefits being offered with certain insurance policies covering long term care services. C) Endowment rider C) Accidental Death Rider A) Insuring clause If Ron goes to a doctor who is not a PPO provider, what will happen? B) It allows for policy loans to be advanced to the insured in the event of unemployment Which of these require an offer, acceptance, and consideration? When does a life insurance policys waiver of premium take effect? A) The original face amount will be paid to the beneficiary A policy loan is made possible by which of these life insurance policy features? B) Cash Surrender A) Optional rider For traditional whole-life policies, the owner decides which of four ways (see below) they would like to access the policys cash value. List of Excel Shortcuts The common disaster provision states the insurer will continue as if, A) the insured outlived the beneficiary What does the guaranteed insurability option allow an insured to do? Waiver of Premium is available on both permanent and term insurance policies S has a Whole Life policy with a premium payment due soon. "Standard nonforfeiture law for life insurance.". A) Martial status P died five years after purchasing a life policy. Of the following dividend options, which of these is taxable? B) The full original death benefit listed on the policy Eric purchased a cash value life insurance policy six years ago. Cash ", NAIC.org. Forfeiture is broadly defined as the loss of property for failing to obey the law, and that property is generally lost to the state. 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. Which life insurance policy provision will permit Elaine to use the life insurance proceeds before she dies to pay for her medical care? B) nonforfeiture option AILife.com. For each, decide whether the discrimination is reasonable and should be permitted or is unreasonable and should be prohibited. C) disability The nonforfeiture benefits clause allows the owner to choose full benefits or partial benefits when the premium can no longer be paid starting after a certain number of years. A) Cash surrender A) Proof of insurability When a policy is in force for a longer duration, the better the cash values and the nonforfeiture values. Which of these is NOT a valid policy dividend option? How much do I qualify to borrow? D) Nonforfeiture options. Cash surrender value applies to the savings element of whole life insurance policies payable before death. Rapid depletion of proceeds can be avoided 40% taxable, similar to a capital gain B. All of the following are Nonforfeiture options EXCEPT a) Reduced paid-up b) Interest only c) Cash surrender d) Extended term b) Interest only Nonforfeiture values include cash surrender, extended term and reduced paid-up. All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT Options a) Extended Term Insurance b) Cash Surrender c) Reducation of Premium d) Reduced Paid-Up Insurance Answer: c) Reduction of Premium Extended Term Reduced Paid-up Cash Surrender Life Income. B) Period of time it takes for a policys underwriting to compete Compute SYXS_{Y X}SYX and interpret your findings Compute the MADM A DMAD and interpret your findings.
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