Chapter 13 Life Insurance Policy, Provisions, Options And Ride

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Chapter 13 Life Insurance Policy, Provisions, Options And Ride

The topic of life insurance can be hard to talk about, given that we generally don’t like to imagine a world where we are no longer living – but if you wish to be able to provide for your loved ones when you move on from this life, then it’s something you need to know about. What do you know about life insurance policies, provisions and more? Let’s find out.


Questions and Answers
  • 1. 
     Which of the following is guaranteed to the policy owner through Non-Forfeiture values?  
    • A. 

      A beneficiary has the right to choose a settlement option

    • B. 

      Dividends on the policy are paid yearly.

    • C. 

      The cash value in a policy belongs to the insured even if the policy lapses or is surrendered

    • D. 

      The premiums on their policy will never increase

  • 2. 
    Which settlement option provides the largest monthly income payments?  
    • A. 

      Life income with Period Certain.

    • B. 

      Fixed Amount

    • C. 

      Life Income

    • D. 

      Joint Survivor

  • 3. 
    Which of the following statements is true about a policy assignment?  
    • A. 

      It is valid during the insured’s lifetime only, because the death benefit is payable to the named beneficiary.

    • B. 

      It transfers the owner’s rights under the policy to the extent expressed in the assignment form

    • C. 

      It is the same as a beneficiary designation

    • D. 

      It permits the beneficiary to designate the person or persons to receive the benefits

  • 4. 
     If a policy holder neglects to select a Non-Forfeiture Option, which one is automatically selected by the insurance company?
    • A. 

      Reduced paid-up

    • B. 

      Cash.

    • C. 

      Extended term

    • D. 

      Interest

  • 5. 
    An insured pays $1,200 annually for her life insurance premium. The insured applies this year’s $300 worth of accumulated dividends to the next year’s premium, thus reducing it to $900. What option does this describe?
    • A. 

      Cash option

    • B. 

      Flexible Premium.

    • C. 

      Accumulation at Interest

    • D. 

      Reduction of Premium

  • 6. 
     Jack 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. Jack was severely injured in an auto accident, and after 12 weeks of hospitalization, he died from the injuries. What amount would his beneficiary receive as a settlement?
    • A. 

      $0

    • B. 

      $100,000 plus the total of paid premiums

    • C. 

      $200,000

    • D. 

      $100,000

  • 7. 
    The Waiver of Cost rider is found in what type of insurance?  
    • A. 

      Whole Life

    • B. 

      Joint and Survivor.

    • C. 

      Juvenile Life

    • D. 

      Universal Life

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