For traditional whole-life policies, the owner decides which of four ways (see below) they would like to access the policys cash value. Recent Examples on the Web This relatively unknown nonforfeiture option is called a life settlement. If an insured dies because of an accident, which type of life insurance rider will provide additional coverage? 609.5315. C) Term life policies are the only type of insurance that allows policy loans A sub-agent cannot take or sign an application. A life insurance policy which ensures that the premium will be paid if the insured becomes disabled has what kind of rider attached? B) It allows for policy loans to be advanced to the insured in the event of unemployment Standard life insurance and long-term care insurance may have nonforfeiture clauses. B) Nonforfeiture \text { Service Revenue } & & 598,000 \\ Free Flashcards about Chapter 3 a. Prepaid Rent. B) suicide Reduced paid-up insurance c. Accumulate at interest d. Extended term Answer: c. Accumulate at interest You should now have gotten the answer to your question "All of the following are nonforfeiture options, EXCEPT:", which was part of Insurance MCQs & Answers. Life Income, Which of the following Dividend options results in taxable income to the policyowner? B) The policy may be paid up early by using policy dividends Which policy provision protects the policyowner from unintentional lapse of the contract? If cash has accumulated in the policy, state law forbids companies from keeping it and cancelling the policy. D) the claim would be denied, A) the policy would be payable, minus the premium amount, The two major actions required for a policyholder to comply with the Reinstatement Clause are, A) provide evidence of insurability, agree to a new incontestable period The length of time when the new policy will be in force will depend on the cash values available from the original policy and the age of the insured party at the time the person chooses the extended-term option. Chapter 4- Policy Provisions, Options and Riders (Exam 2) d. Accumulated Depreciation-Equipment. A) $400 Mike buys a 10-year renewable term policy. 4. Which of the following statements is (are) true with respect to life insurance policy loans? Which military service exclusion clause would pay upon his death? An analysis indicates that prepaid rent on December 31 should be $2,300. I hope you got the correct answer to your question. What kind of rider did S include on the policy? N is covered by a Term Life policy and does not make the required premium payment which was due August 1. All of the following are true regarding a decreasing term policy EXCEPT The insured's premiums will be waived until she is 21. D) Family income rider. reduction of premium Which situation accurately describes a reduced paid-up nonforfeiture option? You can learn more about the standards we follow in producing accurate, unbiased content in our. C) policy and any verbal agreements All of the following statements are true regarding a policy's Grace period EXCEPT Past due premiums are waived Policy loans may still be made Full coverage continues Grace period terms are stated in the policy Salaries and Wages Payable. Paid-up additional insurance is whole life insurance that a policyholder purchases using the policys dividends. C) The policys premiums will increase after 20 years We also reference original research from other reputable publishers where appropriate. A) Policy Summary "What Are Life Insurance Non-Forfeiture Options? Cash surrender value applies to the savings element of whole life insurance policies. The following situations involve some form of discrimination. Which of the following is CORRECT regarding the death benefit amount? A) Declarations Work with our consultant to learn what to alter. How much will the insurer pay? In a life insurance policy, which provision states who may select policy options, designate and name a beneficiary, and be the recipient of any financial benefits from the policy? D) The agents obligation to pay a death benefit upon an approved death claim, C) The insurers obligation to pay a death benefit upon an approved death claim. AzAnswer team is here with the right answer to your question. C) Dividend schedule Ron has a life insurance policy with a face value of $100,000 and a cost of living rider. g. Salaries and Wages Expense D) Full face amount. Correct answer: (D) While investigating the claim, the insurer discovered material misrepresentations made by P during the application process. Forfeiture (law) - Wikipedia C) reinstatement provision C) Annuity rider Which of these is NOT a type of agent authority? D) It allows for a third party to purchase a life insurance policy at a discounted rate and immediately advance a portion of the death benefit, C) It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill. A life insurance policy can be surrendered for its cash value under which policy provision? Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it? g. Income taxes of$55,539 are owed but unrecorded and unpaid. These include white papers, government data, original reporting, and interviews with industry experts. D was actively serving in the Marines when he was killed in an automobile accident while on leave. reduced paid-up insurance. 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. B) Age Which of these require an offer, acceptance, and consideration? D) interest-only option. \text { Account } & \textbf { Debit } & \textbf { Credit } \\ Which of the following statements about accumulated interest earned on dividends from an insurance policy is TRUE? C) nonforfeiture option. S dies 1 year later of natural causes. A) Entire contract period revoke an absolute assignment All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT. The extended-term payout option allows the policy owner to buy an extended-term policy using the cash values from the original policy. What does the grace period allow a life insurance policyowner to do? What Is Charitable Gift of Life Insurance? What is an insurance policys grace period? C) transferable assignment When an accidental death benefit is added to a whole life policy, how does this affect the policys cash value? If D dies without making any further changes, to whom will the policy proceeds be paid to? The correct answer is "Automatic Premium Loan Option". C) Covered hazard All of the following are dividend options EXCEPT: Fixed-period installments. S would like to use dividends from her life insurance policy to purchase paid-up additions. Which of these is an element of a Variable Life policy? What will the insurer pay to Ps beneficiary? T took out a $50,000 life insurance policy with an Accidental Death and Dismemberment rider. D) medical underwriting. 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 . D) experiencing financial hardship. B) Face amount of the new policy equals that of the original policy D) Insured has become terminally ill. 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 Set the qualitative variable to 0 if the engine type is a diesel. C) waiting period C) Extended term option C) One-year term b The cash value in a policy belongs Policyholders can choose to access the policy's cash value through cash . 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. Diffusion Let us complete them for you. B) during the last 12 months He forgot to pay the premium that was due last week. Which provision will pay a portion of the death benefit prior to the insureds death due to a serious illness? Under a life insurance policy, what does the insuring clause state? Mississippi. B) Insured becomes totally disabled She died January 10 without making the premium payment. C) Return of premium provision What are collateral assignments normally associated with? B) Policy exclusion B) Insuring provision A) Long-term care rider A lower face amount than the whole life policy. C) Policys cash value is not affected B) guaranteed insurability rider A nonforfeiture clause is an element included in standard life insurance and long-term care insurance. D) provide a valid reason for the lapse, B) provide evidence of insurability to the insurer. suicide. The death benefit would be equal to the benefit in the original whole life insurance policy. It is tax deductible D) Reinstatement, A whole life policy option where extended term insurance is selected is called a(n), A) dividend option Georgia requires legal actions to be brought forth no sooner than 60 days and no later than 3 years after proof of loss. However, the death benefit that surviving dependents of the policy owner would receive is lower than the amount of cash value in the original life insurance policy. Past-due interest on a policy loan is added to the total debt a) Modified life b) Variable life c) Ordinary life d) Graded premium whole life. All of the following are Nonforfeiture options EXCEPT a Reduced paid-up b Interest only c Cash surrender d Extended term 6: Which of the following is guaranteed to the policyowner through nonforfeiture values? B) Before payment of the benefit is made, specific conditions must exist, such as suffering from a terminal illness Which of the following provisions guarantees that premiums will be waived if a Juvenile Life policyowner becomes disabled? C) The entire cash value is taxable Kurt is an active duty serviceman who was recently killed in an accident while home on leave. Coverage will be adjusted to reflect the insureds true age if a misstatement of age is discovered. Bruce is involved in an accident and becomes totally and permanently disabled. Long Term Care: Optional Benefits | Department of Financial Services Consider consulting a financial advisor who can guide you on choosing an option that will best fit your circumstances. If the consumer price index has gone up 4%, how much may Ron increase the face value of the policy? Which of these is NOT considered to be a common life insurance nonforfeiture option? In order to project a classy image, an expensive seafood restaurant requires that its servers wear tuxedos . B) The full original death benefit listed on the policy However, during the early years of awhole life insurance policy, the savings portion brings little return compared to thepremiumspaid. All of the following are considered to be nonforfeiture options A) Cash surrender How is a life insurance policy dividend legally defined? C) dies instantly from a car accident It is taxed as ordinary income. A Medicare Supplement policy must provide coverage for pre-existing conditions after the policy has been in force for a) 1 year b) 2 years c) 90 days d) 6 months. You are eligible for the reduced "paid up" contingent nonforfeiture benefit when all three conditions shown below are met: The premium you are required to pay after the increase exceeds your original premium by the same percentage or more shown in the chart below; Triggers for a Substantial Premium Increase Issue Age Under 65 65-80 Over 80 The interest earned on policy dividends is A. policy has a decreased face amount A life insurance policyowner does NOT have the right to. B owns a Whole Life policy with a guaranteed insurability option that allows him to purchase, without evidence of insurability, stated amounts of, additional Whole Life coverage at specified times. It is not taxable C) Suicide clause B) Application Nonforfeiture clauses offer protection in the event a policyholder stops paying their premium. 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. Deducted based on the income level. A waiting period must pass before becoming eligible for benefits What is the purpose for having an accelerated death benefit on a life insurance policy? C) resubmit a new life insurance application Life insurance policyholders can select one of four nonforfeiture benefit options: the cash surrender value, extended term insurance, loan value, and paid-up insurance. B) add-on When the owner of whole-life insurance policy surrenders thepolicy, they have several nonforfeiture options. 2003-2023 Chegg Inc. All rights reserved. Standard life insurance and long-term care insurance policies may have a nonforfeiture clause. Which of these is NOT a characteristic of the Accelerated Death Benefit option? There are currently two common types of nonforfeiture benefits being offered with certain insurance policies covering long term care services. The policy is then issued with no scuba exclusions. Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value. Explain your reasons. All of the following are optional methods of settlement after the insured has died EXCEPT. Insurance companies can send delinquent interest accounts to a collection agency A) Waiver of premium provision During the claim process, the insurer discovers that L had understated her age on the application. Elaine was diagnosed with a terminal illness. A Tax deductible. Refer to the earlier problem. Cash surrender value b. Jerry is an insured who understated his age on his life insurance application, paying $12 per $1,000 of insurance instead of $15 per $1,000. \text { Retained Earnings, 12/31/2018 } & & 37,000 \\ The automatic premium loan provision is designed to, All of these statements concerning Settlement Options are true EXCEPT A) Accumulation at Interest Option At year end, you have the following data for adjustments: a. C) collateral assignment All of the following are Nonforfeiture Options EXCEPT Cash Surrender Option Extended Term Option Reduced Paid-Up Option Automatic Premium Loan Option Related MCQs ? C) There may be a dollar limit on the maximum benefit C) disability B) dies of a stroke If the teacher wants an increasing Death Benefit to protect against inflation, the teacher should select which of the following Dividend Options? d) The PPO will pay reduced benefits. After a policy has lapsed, which provision allows the insured to continue coverage? D) grace period. Each takes out a $500,000 life insurance policy on the other, naming himself as primary beneficiary. PDF Long-term Care Insurance Past-due interest payments not paid after 3 months will void the policy D) Grace period, All of these are standard exclusions found in a life insurance policy EXCEPT, A) hazardous occupations D) Cash dividend option. $50,000 minus any outstanding policy loans. B) Free look period D) Grace period provision. D) Nonforfeiture options. Discover your next role with the interactive map. C) minus indebtedness and without interest 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. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. B) select a beneficiary Please check below to know the answer. Cash Value vs. D) Settlement options. Life Income, All of the following statements are true regarding a policys Grace period EXCEPT AILife.com. Accumulation at Interest 350 Flashcards | Chegg.com Ron has a life insurance policy with a face value of $100,000 and a cost of living rider. Fixed Period B) Status C) no beneficiary was ever named Dorian exercised a nonforfeiture option by using his life policys cash value to purchase an extended term insurance option. When a life insurance policy is surrendered, how does the cost recovery rule apply? D) the insured and beneficiary died at the same time. How many first time home buyers did you work with last year? B) Nonparticipating policies issue dividends One of the questions on the application asks if P engages in scuba diving, to which P answers "No". Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options? A policy loan is issued by an insurance company and uses the cash value of a life insurance policy as collateral. D) any surrender charges owed by the policyowner, B) past due premiums that have not been paid by the end of the grace period. 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. The Accelerated Death Benefit provision in a life insurance policy is also known as a(n), Which statement is TRUE in regards to a policy loan? A young, married teacher has two children and owns a Whole Life policy. B) nonforfeiture option Sometimes, a policy expires after a so-called grace period. Policy loans may still be made Just like with a conventional loan, youll be charged interest that could range from 5% to 9% on the loan. A) Grace period To keep advancing your career, the additional CFI resources below will be useful: Within the finance and banking industry, no one size fits all. C) Reinstatement period A policyowner may exercise which of these dividend options that uses the dividend to pay all or part of the next premium due? D) hazardous occupations. D) Certificate of Authority, All of these are valid policy dividend options for a life insurance policyowner EXCEPT, A) cash outlay to the policyowner A) Waiver D) Conditions. Paid-up Additions Their purpose is to protect the insured's accumulated cash values in case the Whole Life or Endowment policy lapses. B) Period of time it takes for a policys underwriting to compete \text { Accounts Receivable } & 15,900 & \\ Partially tax deductible depending on the income level. a) The company b) The insured c) The agent d) The counselor. o paid - up additions extended term insurance . D) The policys cash values steadily decrease after 20 years, B) The policy may be paid up early by using policy dividends, A guaranteed issue insurance policy has no, A) initial premium requirement C) Accidental Death Rider Which type of rider will waive the premium on a childs life insurance policy if the parent paying the premium dies? ? However, any money you take out will be deducted from the death benefit that goes to your beneficiaries. reduced paid - up insurance cash value . Structured Query Language (known as SQL) is a programming language used to interact with a database. Excel Fundamentals - Formulas for Finance, Certified Banking & Credit Analyst (CBCA), Business Intelligence & Data Analyst (BIDA), Commercial Real Estate Finance Specialization, Environmental, Social & Governance Specialization, Cryptocurrency & Digital Assets Specialization (CDA), Business Intelligence Analyst Specialization, Commercial Banking & Credit Analyst (CBCA), National Association of Insurance Commissioners (NAIC), Financial Planning & Wealth Management Professional (FPWM). B) accumulate without interest f. Service Revenue. B) Make a premium payment after the due date without any loss of coverage Fixed Amount Which of these describe a participating life insurance policy? Who the policyowner is and what rights the policyowner is entitled to. Change the beneficiary, if revocable, Modify a provision in the insurance contract. D) war. d. What price range is your specialty? What action will the insurer take?
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