Chapter 4: Life Insurance Policies, Options And Riders

Reviewed by Editorial Team
The ProProfs editorial team is comprised of experienced subject matter experts. They've collectively created over 10,000 quizzes and lessons, serving over 100 million users. Our team includes in-house content moderators and subject matter experts, as well as a global network of rigorously trained contributors. All adhere to our comprehensive editorial guidelines, ensuring the delivery of high-quality content.
Learn about Our Editorial Process
| By Kernsshanice
K
Kernsshanice
Community Contributor
Quizzes Created: 9 | Total Attempts: 5,224
| Attempts: 1,093
SettingsSettings
Please wait...
  • 1/41 Questions

    The least expensive option to pay off a 30-year mortgage balance would be

    • Convertible term life
    • Decreasing term life
    • Adjustable term life
    • Increasing term life
Please wait...
About This Quiz

This quiz assesses knowledge on life insurance policies, including term levels, payment options, and riders. It covers aspects like universal life, variable life insurance, and benefits of adding riders, essential for professionals in the insurance sector.

Chapter 4: Life Insurance Policies, Options And Riders - Quiz

Quiz Preview

  • 2. 

    Term insurance is appropriate for someone who

    • Seeks living benefits for themselves

    • Seeks a policy that builds cash value

    • Seeks temporary protection and lower premiums

    • Seeks permanent preotection and higher premiums

    Correct Answer
    A. Seeks temporary protection and lower premiums
    Explanation
    Term insurance is appropriate for someone who seeks temporary protection and lower premiums. Term insurance provides coverage for a specific period, such as 10 or 20 years, and does not build cash value. It is designed to provide financial protection to the policyholder's beneficiaries in case of their untimely death during the term of the policy. Since it does not accumulate cash value, the premiums for term insurance are generally lower compared to permanent insurance policies. This makes it a suitable choice for individuals who want affordable coverage for a specific period of time.

    Rate this question:

  • 3. 

    Barbara's policy includes a rider which allows her to purchase additional insurance at specific dates or events without evidence of insurability. This rider is called a(n)

    • Guaranteed insurability rider

    • Payor rider

    • Endowment rider

    • Family income rider

    Correct Answer
    A. Guaranteed insurability rider
    Explanation
    A guaranteed insurability rider is a type of insurance rider that allows the policyholder to purchase additional insurance at specific dates or events without having to provide evidence of insurability. This means that Barbara can increase her coverage without having to go through the usual underwriting process, such as providing medical information or undergoing a medical examination. This rider provides flexibility and convenience for the policyholder to adjust their coverage as their needs change over time.

    Rate this question:

  • 4. 

    An insurer will accept a premium from the insured and continue the coverage in full force as though it was NOT late during which time period?

    • Incontestable period

    • Probation period

    • Reinstatement period

    • Grace period

    Correct Answer
    A. Grace period
    Explanation
    During the grace period, an insurer will accept a premium from the insured and continue the coverage in full force as though it was not late. The grace period is a specified period of time after the premium due date, during which the insured can make the payment without any penalty or loss of coverage. It provides a buffer period for the insured to make the payment and ensures that coverage remains in effect even if the premium payment is slightly delayed.

    Rate this question:

  • 5. 

    Julie has a $100,000 30-year mortgage on her new home. What type of life insurance could she purchase that is designed to pay off the loan balance if she dies within the 30-year period?

    • Adjustable life insurance

    • Decreasing term insurance

    • Increasing term insurance

    • Modified life insurance

    Correct Answer
    A. Decreasing term insurance
    Explanation
    Decreasing term insurance is the correct answer because it is specifically designed to pay off a mortgage balance if the insured person dies within a certain period of time, in this case, the 30-year mortgage term. The coverage amount decreases over time, aligning with the decreasing mortgage balance. This type of insurance provides financial protection to ensure that the mortgage is paid off in the event of the insured person's death, relieving the burden on their family or beneficiaries.

    Rate this question:

  • 6. 

    Which of the following policies does NOT build cash value?

    • Term

    • Straight life

    • Endowment

    • Variable Life

    Correct Answer
    A. Term
    Explanation
    Term life insurance is a type of policy that does not build cash value. Unlike other types of life insurance policies, such as straight life, endowment, and variable life, term life insurance only provides coverage for a specific term or period of time. If the insured individual passes away during the term of the policy, the death benefit is paid out to the designated beneficiaries. However, if the insured individual outlives the term of the policy, there is no cash value or investment component to be received.

    Rate this question:

  • 7. 

    A life insurance policyowner was injured in an automobile accident which results in a total and permanent disability. Which rider would pay a monthly amount because of this disability?

    • Long-term care rider

    • Disability income rider

    • Annuity rider

    • Waiver of premium

    Correct Answer
    A. Disability income rider
    Explanation
    The correct answer is the Disability income rider. This rider provides a monthly payment to the policyowner in the event of a total and permanent disability resulting from an automobile accident. It is specifically designed to provide income replacement in case of disability, ensuring that the policyowner can continue to meet their financial obligations despite being unable to work.

    Rate this question:

  • 8. 

    A life insurance policy that contains a guaranteed interest rate with the chance to earn a rate that is higher than the guaranteed rate is called

    • Whole life

    • Group life

    • Credit life

    • Universal life

    Correct Answer
    A. Universal life
    Explanation
    Universal life insurance policies offer a guaranteed interest rate, which means that the policyholder will earn a minimum rate of return on their cash value. However, these policies also have the potential to earn a higher interest rate based on the performance of the underlying investments. This flexibility allows policyholders to potentially earn more on their policy's cash value compared to other types of life insurance policies.

    Rate this question:

  • 9. 

    Under a life insurance policy, what does the insuring clause state?

    • The agent's obligation to provide the proper amount of coverage

    • The insurer's obligation to return all premiums upon an approved death claim

    • The insurer's obligation to pay a death benefit upon an approved death claim

    • The agent's obligation to pay a death benefit upon an approved death claim

    Correct Answer
    A. The insurer's obligation to pay a death benefit upon an approved death claim
    Explanation
    The insuring clause in a life insurance policy states the insurer's obligation to pay a death benefit upon an approved death claim. This means that if the insured person passes away and the death claim is approved, the insurer is obligated to provide the agreed-upon amount of money to the beneficiaries listed in the policy. The insuring clause is a fundamental part of the life insurance contract and outlines the primary responsibility of the insurer in the event of the insured's death.

    Rate this question:

  • 10. 

    Which of the following is NOT part of an insurance contract?

    • Policy

    • Application

    • Riders

    • Certificate of Authority

    Correct Answer
    A. Certificate of Authority
    Explanation
    A certificate of authority is not part of an insurance contract. It is a document issued by a regulatory authority that grants an insurance company the legal authority to operate in a specific jurisdiction. It is not a contractual document that outlines the terms and conditions of the insurance agreement between the insurer and the insured. The policy, application, and riders, on the other hand, are all integral components of an insurance contract. The policy outlines the coverage and terms, the application is the initial request for insurance, and riders are additional provisions or modifications to the policy.

    Rate this question:

  • 11. 

    Rob purchased a standard whole life policy with a $500,000 death benefit when he was age 30. His insurance agent told him the policy would be paid up if he reached age 100. The present cash value of the policy equals $250,000. Rob recently died at age 60. The death benefit would be

    • $250,000

    • $750,000

    • $375,000

    • $500,000

    Correct Answer
    A. $500,000
    Explanation
    The death benefit would be $500,000. This is because Rob purchased a standard whole life policy with a $500,000 death benefit, which means that upon his death, his beneficiaries will receive the full amount of the death benefit stated in the policy, regardless of the cash value of the policy at the time of his death. The fact that the policy would be paid up if he reached age 100 is irrelevant to the death benefit amount.

    Rate this question:

  • 12. 

    A provision that allows a policyowner to temporarily give up ownership rights to secure a loan is called a(n)

    • Automatic premium loan

    • Nonforfeiture option

    • Collateral assignment

    • Irrevocable assignment

    Correct Answer
    A. Collateral assignment
    Explanation
    A collateral assignment is a provision that allows a policyowner to temporarily give up ownership rights to secure a loan. This means that the policyowner can use the policy as collateral for a loan, providing security to the lender. In the event that the policyowner defaults on the loan, the lender has the right to claim the policy's cash value or death benefit to recoup the loan amount. This arrangement allows the policyowner to access funds while keeping the policy in force.

    Rate this question:

  • 13. 

    What is the automatic continuance of insurance coverage referred to as?

    • Renewal

    • Reinstatement

    • Resumption

    • Renovation

    Correct Answer
    A. Renewal
    Explanation
    The automatic continuance of insurance coverage is referred to as "renewal." This means that the insurance policy is extended for another term without the policyholder having to take any action. Renewal ensures that the policy remains in force and provides continuous coverage. Reinstatement, resumption, and renovation do not accurately describe the automatic continuance of insurance coverage.

    Rate this question:

  • 14. 

    The two major actions required for a policyholder to comply with the Reinstatement Clause are

    • Provide evidence of insurability, agree to a new incontestable period

    • Provide evidence of insurability, pay past due premiums

    • Pay past due premiums, agree to a new incontestable period

    • Pay past due premiums, agree to a reduction in coverage

    Correct Answer
    A. Provide evidence of insurability, pay past due premiums
    Explanation
    The Reinstatement Clause is a provision in an insurance policy that allows a policyholder to reinstate their coverage after it has lapsed due to non-payment of premiums. In order to comply with this clause, the policyholder needs to provide evidence of insurability, which typically involves submitting a health questionnaire or undergoing a medical examination to prove that they are still insurable. Additionally, they need to pay any past due premiums that were missed during the lapse period. By fulfilling these two actions, the policyholder can reinstate their coverage and continue their insurance policy as before.

    Rate this question:

  • 15. 

    Alife insurance rider that allows an individual to purchase insurance as they grow older regardless of insurability, is called a(n)

    • Guaranteed term rider

    • Guarannteed insurability rider

    • Accelerated benefit rider

    • Cost of livng rider

    Correct Answer
    A. Guarannteed insurability rider
    Explanation
    A guaranteed insurability rider is an additional feature that can be added to a life insurance policy. It allows the policyholder to purchase additional insurance coverage at specific intervals in the future, regardless of their insurability at that time. This means that even if the individual's health or other factors change, they can still obtain more coverage without having to go through the underwriting process again. This rider is beneficial because it ensures that the policyholder can increase their coverage as they age, providing them with the financial protection they need.

    Rate this question:

  • 16. 

    A securities license is required for a life insurance producer to sell

    • Modified life insurance

    • Modified Endowment Contracts (MEC)

    • Variable life insurance

    • Universal life insurance

    Correct Answer
    A. Variable life insurance
    Explanation
    A securities license is required for a life insurance producer to sell variable life insurance because variable life insurance policies allow the policyholder to invest a portion of the premium payments into various investment options, such as stocks, bonds, or mutual funds. This means that the policy's value can fluctuate based on the performance of these investments. Since variable life insurance involves an investment component, it falls under the jurisdiction of securities regulations, hence the need for a securities license to sell it.

    Rate this question:

  • 17. 

    Jonas is a whole life insurance policyowner and would like to add coverage for his two children. Which of the following products would allow him to accomplish this?

    • Child term rider

    • Payor rider

    • Family maintenance rider

    • Family income rider

    Correct Answer
    A. Child term rider
    Explanation
    A child term rider is a type of insurance policy add-on that provides coverage for the policyowner's children. It is designed to provide a death benefit if any of the insured children were to pass away during the term of the rider. This allows Jonas to add coverage specifically for his two children, ensuring that they are protected financially in the event of their untimely death.

    Rate this question:

  • 18. 

    A limited payment whole life policy provides

    • Protection for 20 years

    • Lifetime protection

    • Protection for more than one person

    • Discounted premiums

    Correct Answer
    A. Lifetime protection
    Explanation
    A limited payment whole life policy provides lifetime protection, meaning that the policyholder is covered for their entire life as long as premiums are paid. This type of policy does not have an expiration date or a specified term of coverage like the other options mentioned. It offers the peace of mind of knowing that the policyholder's beneficiaries will receive a death benefit whenever they pass away, regardless of when that may be.

    Rate this question:

  • 19. 

    A provision that allows a policyowner to withdraw a policy's cash value interest free is a(n)

    • Partial surrender

    • Waiver of premium

    • Automatic premium loan

    • Grace period

    Correct Answer
    A. Partial surrender
    Explanation
    A partial surrender allows a policyowner to withdraw a policy's cash value interest free. This means that the policyowner can take out a portion of the cash value without any penalties or charges. This provision provides flexibility to the policyowner, allowing them to access their funds when needed without incurring any additional costs.

    Rate this question:

  • 20. 

    An endorsement found in an insurance plan which modifies the provision of the policy is called a(n)

    • Attachment

    • Add-on

    • Rider

    • Supplement

    Correct Answer
    A. Rider
    Explanation
    A rider is an additional provision added to an insurance policy that alters or enhances its coverage. It is an endorsement that modifies the policy's provisions, usually to provide additional benefits or coverage for specific situations or risks. A rider can be used to customize an insurance plan according to the policyholder's specific needs or preferences. Therefore, a rider is the correct answer as it accurately describes an endorsement that modifies the provisions of an insurance policy.

    Rate this question:

  • 21. 

    What types of life insurance are normally used for key employee identification?

    • Term, whole, and universal life insurance

    • Increasing term insurance

    • Joint, credit, and group life insurance

    • Adjustable, permanent, and limited-pay life insurance

    Correct Answer
    A. Term, whole, and universal life insurance
    Explanation
    Term, whole, and universal life insurance are normally used for key employee identification. Term life insurance provides coverage for a specific period of time and is often used to protect against the loss of income that would result from the death of a key employee. Whole life insurance provides coverage for the entire lifetime of the insured and can be used to provide a cash value that can be accessed by the company if needed. Universal life insurance offers flexibility in premium payments and death benefits, making it suitable for key employee identification.

    Rate this question:

  • 22. 

    Joe has a life insurance policy that has a face amount of $300,000. After a number of years, the policy's cash value accumulates to $50,000 and the face amount becomes $350,000. What kind of policy is this?

    • Increasing Term Life policy

    • Nonparticipating policy

    • Modified Whole Life policy

    • Universal Life policy

    Correct Answer
    A. Universal Life policy
    Explanation
    This is a Universal Life policy because it has a cash value component that accumulates over time. The policyholder's premiums go towards both the insurance coverage and the cash value, which can grow based on interest rates and investment performance. The face amount of the policy also increases, indicating that it has a flexible death benefit that can be adjusted by the policyholder.

    Rate this question:

  • 23. 

    A whole life policy option where extended term insurance is selected is called a(n)

    • Dividend option

    • Settlement option

    • Nonforfeiture option

    • Interest-only option

    Correct Answer
    A. Nonforfeiture option
    Explanation
    A nonforfeiture option is a whole life policy option where extended term insurance is selected. This means that if the policyholder decides to surrender the policy before it matures, they will receive the cash value of the policy or the option to convert it into an extended term insurance policy. This ensures that the policyholder does not lose the value of their investment if they choose to discontinue the policy.

    Rate this question:

  • 24. 

    Level premium permanent insurance accumulates a reserve that will eventually

    • Equal the face amount of the policy

    • Pay a dividend to the policyowner

    • Require the policyowner to make periodic withdrawals

    • Become larger than the face amount

    Correct Answer
    A. Equal the face amount of the policy
    Explanation
    Level premium permanent insurance is a type of insurance where the premiums paid by the policyholder remain the same throughout the life of the policy. Over time, these premiums accumulate and create a reserve within the policy. This reserve will continue to grow until it eventually equals the face amount of the policy. In other words, the reserve will reach a point where it is equal to the death benefit that will be paid out to the policyholder's beneficiaries upon their death. Therefore, the correct answer is that the reserve will equal the face amount of the policy.

    Rate this question:

  • 25. 

    A life insurance policy normally contains a provision that restricts coverage in the event of death under all of the following situations EXCEPT

    • Fare-paying passenger

    • Pilot of personal airplane

    • Suicide

    • War

    Correct Answer
    A. Fare-paying passenger
    Explanation
    A life insurance policy normally contains a provision that restricts coverage in the event of death under all of the following situations except for a fare-paying passenger. This means that if the insured person dies while being a fare-paying passenger, the policy will still provide coverage. However, coverage may be restricted or denied in the case of the insured person being a pilot of a personal airplane, death by suicide, or death due to war.

    Rate this question:

  • 26. 

    What is the name of the provision which states that a copy of the application must be attached to the policy when issued?

    • Policy Summary

    • Buyer's Guide

    • Entire Contract

    • Entire Policy

    Correct Answer
    A. Entire Contract
    Explanation
    The provision that states that a copy of the application must be attached to the policy when issued is called the "Entire Contract" provision. This provision ensures that the application, which contains important information about the insured, is included with the policy to provide a complete and accurate record of the insurance agreement.

    Rate this question:

  • 27. 

    A life insurance policy that is subject to a contract interest rate is referred to as

    • Adjustable life

    • Group life

    • Term life

    • Universal life

    Correct Answer
    A. Universal life
    Explanation
    Universal life insurance policies are subject to a contract interest rate. This means that the cash value of the policy can earn interest based on the performance of the underlying investments. The policyholder has the flexibility to adjust the premium payments and death benefit as needed. Universal life insurance provides a combination of a death benefit and a savings component, allowing the policyholder to accumulate cash value over time. The contract interest rate determines the growth of the cash value, making it a key feature of universal life insurance policies.

    Rate this question:

  • 28. 

    Shawn, Mike, and Dave are brothers who have a $100,000 "first to die" joint life policy covering all three of their lives. If Mike dies first, the policy proceeds 

    • Will no longer provide insurance protection

    • Will go to Mike's estate

    • Will be divided by probate

    • Will not be paid until the last brother dies

    Correct Answer
    A. Will no longer provide insurance protection
    Explanation
    If Mike dies first, the policy proceeds will no longer provide insurance protection. This means that the policy will no longer cover the lives of Shawn and Dave. The purpose of the policy is to provide insurance coverage in the event of the death of any of the brothers. Since one of the brothers has already passed away, the policy can no longer fulfill its intended purpose of providing insurance protection.

    Rate this question:

  • 29. 

    Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value. She would like to borrow $15,000 against the cash value. Which of the following statements is TRUE?

    • Net death benefit will be reduced if the loan is not repaid

    • No interest will be charged on loan balance

    • Term life policies are the only type of insurance that allows policy loans

    • A loan can be taken out for up to the face amount of the policy

    Correct Answer
    A. Net death benefit will be reduced if the loan is not repaid
    Explanation
    If Joanne borrows $15,000 against the $25,000 cash value of her whole life policy, the net death benefit will be reduced if the loan is not repaid. This is because the cash value is used as collateral for the loan, and if the loan is not repaid, the insurance company will deduct the outstanding loan balance from the death benefit payout.

    Rate this question:

  • 30. 

    A Modified Endowment Contract (MEC) is best described as

    • A life insurance contract which accumulates cash values higher than the IRS will allow

    • An annuity contract which was converted from a life insurance contract

    • A modified life contract which enjoys all the tax advantages of whole life insurance

    • A life insurance contract where all withdrawals prior to age 65 are subject to a 10% penalty

    Correct Answer
    A. A life insurance contract which accumulates cash values higher than the IRS will allow
    Explanation
    A Modified Endowment Contract (MEC) is a type of life insurance contract that accumulates cash values that exceed the limits set by the IRS. This means that the policyholder is depositing more money into the policy than what is allowed under the tax laws. As a result, the tax advantages of the policy may be limited or even eliminated.

    Rate this question:

  • 31. 

    Ownership of a life insurance policy may be temporarily transferred with a(n)

    • Collateral assignment

    • Absolute assignment

    • Transferable assignment

    • Beneficiary assignment 

    Correct Answer
    A. Collateral assignment
    Explanation
    A collateral assignment allows the temporary transfer of ownership of a life insurance policy. This means that the policyholder can use the policy as collateral for a loan or other financial arrangement. The policyholder retains the right to reclaim ownership once the loan is repaid. This type of assignment is commonly used when the policyholder needs to secure a loan but does not want to permanently transfer ownership of the policy.

    Rate this question:

  • 32. 

    Pat owns a 20-pay life policy with a paid-up dividend option. Which of the following statements is true?

    • The policy may be paid up early by using accumulated cash values

    • The policy may be paid up early by using policy dividends

    • The policy's premiums will increase after 20 years

    • The policy's cash values steadily decrease after 20 years

    Correct Answer
    A. The policy may be paid up early by using policy dividends
    Explanation
    A 20-pay life policy means that the policyholder pays premiums for 20 years. After 20 years, the policy may be paid up early, meaning the policyholder no longer needs to pay premiums, by using policy dividends. Policy dividends are a portion of the insurance company's profits that are returned to policyholders. Therefore, the correct answer is "The policy may be paid up early by using policy dividends."

    Rate this question:

  • 33. 

    Loans obtained by a policyowner against the cash value of a life insurance policy

    • Are treated as taxable income

    • Would not be treated as taxable income

    • Are limited by the face amount of the policy

    • Would be subject to a Federal estate tax

    Correct Answer
    A. Would not be treated as taxable income
    Explanation
    Loans obtained by a policyowner against the cash value of a life insurance policy would not be treated as taxable income. This is because these loans are considered a borrowing against the policyholder's own assets, rather than an income or gain. As a result, they are not subject to taxation.

    Rate this question:

  • 34. 

    When a decreasing term policy is purchased, it contains a decreasing death benefit and 

    • Increasing premiums

    • Level premiums

    • Decreasing premiums

    • Variable premiums

    Correct Answer
    A. Level premiums
    Explanation
    A decreasing term policy is a type of life insurance policy where the death benefit decreases over time. However, the premiums paid for this policy remain level throughout the term. This means that the policyholder pays the same amount of premium throughout the duration of the policy, regardless of the decreasing death benefit. This allows the policyholder to have a consistent premium payment and plan their budget accordingly.

    Rate this question:

  • 35. 

    A rider that assures premiums will be paid on a juvenile policy until the child reaches a specific age is called a(n)

    • Waiver of premium rider

    • Payor rider

    • Automatic premium loan rider

    • Juvenile waiver rider

    Correct Answer
    A. Payor rider
    Explanation
    A payor rider is a type of insurance policy rider that ensures premiums will be paid on a juvenile policy until the child reaches a specific age. This means that if the payor, who is typically the parent or guardian, becomes disabled or dies before the child reaches the specified age, the insurance company will continue to pay the premiums on behalf of the child. This rider provides financial protection for the child's policy and ensures that it remains in force until the child reaches adulthood.

    Rate this question:

  • 36. 

    All of these are valid policy dividend options for a life insurance policyowner EXCEPT

    • Cash outlay to the policyowner

    • Accumulate without interest

    • Reduction in policy premium

    • Buy additional insurance coverage

    Correct Answer
    A. Accumulate without interest
    Explanation
    The given options are all valid policy dividend options for a life insurance policyowner, except for "accumulate without interest." This means that policyholders can choose to receive a cash outlay, have a reduction in policy premium, or buy additional insurance coverage using their policy dividends. However, accumulating without interest is not a valid option as it would not provide any growth or benefit to the policyholder's investment.

    Rate this question:

  • 37. 

    Which type of life insurance policy pays the face amount at the end of the specified period if the insured is still alive?

    • Adjustable life policy

    • Modified life policy

    • Endowment policy

    • Universal life policy

    Correct Answer
    A. Endowment policy
    Explanation
    An endowment policy is a type of life insurance policy that pays the face amount at the end of the specified period if the insured is still alive. This means that if the insured survives the specified period, they will receive the full benefit amount. Unlike other types of life insurance policies, an endowment policy provides both life insurance coverage and a savings component, making it a popular choice for individuals who want to ensure a payout regardless of whether they pass away or not.

    Rate this question:

  • 38. 

    Donald is the primary insured of a life insurance policy and adds a children's term rider. What is the advantage of adding this rider?

    • Can't be converted to permanent coverage without evidence of insurability

    • Coverage can be different for each child

    • Premiums on this rider are not required until the limiting age is reached

    • Increase the policy's overall cash value

    Correct Answer
    A. Can't be converted to permanent coverage without evidence of insurability
    Explanation
    Adding a children's term rider to a life insurance policy means that the coverage for the children cannot be converted to permanent coverage without providing evidence of insurability. This means that if the children want to continue the coverage beyond the term period, they will need to go through the underwriting process and prove that they are insurable. This can be advantageous for the primary insured as it provides flexibility and control over the policy, ensuring that the coverage for the children is not automatically converted without their consent or without meeting certain criteria.

    Rate this question:

  • 39. 

    What does the word "level" in Level Term describe?

    • The period of coverage

    • The face amount

    • The premium payments

    • The cash value

    Correct Answer
    A. The face amount
    Explanation
    The word "level" in Level Term describes the face amount. In a level term life insurance policy, the face amount remains constant throughout the entire term of the policy. This means that the death benefit paid out to the beneficiaries will not decrease over time. It provides a consistent and predictable payout, which can be beneficial for individuals who want to ensure a certain amount of financial protection for their loved ones.

    Rate this question:

  • 40. 

    Which of these riders will pay a death benefit if the insured's spouse dies?

    • Guaranteed Insurability ride

    • Family term insurance rider

    • Family whole insurance rider

    • Payor benefit rider

    Correct Answer
    A. Family term insurance rider
    Explanation
    The Family term insurance rider is designed to provide a death benefit if the insured's spouse dies. This rider is typically added to a life insurance policy to extend coverage to the insured's family members, specifically the spouse. In the event of the spouse's death, the rider ensures that a death benefit will be paid out to the insured, providing financial protection during a difficult time.

    Rate this question:

  • 41. 

    Which of these is NOT a characteristic of the Accelerated Death Benefit option?

    • The face amount ad policy premium are not affected by the payment

    • Before payment of the benefit made, specific conditions mujst exist, such as suffering from a terminal illness

    • There may be a dollar limit on the maximum benefit

    • The benefit can be offered as a rider at a specific extra cost or may be at no cost

    Correct Answer
    A. The benefit can be offered as a rider at a specific extra cost or may be at no cost
    Explanation
    The correct answer is that the benefit can be offered as a rider at a specific extra cost or may be at no cost. This means that the Accelerated Death Benefit option can be added to a policy as a rider, either with an additional cost or without any additional cost. This is not a characteristic of the option, as it does not specify whether the face amount or policy premium are affected by the payment, or whether there may be a dollar limit on the maximum benefit.

    Rate this question:

Quiz Review Timeline (Updated): Mar 21, 2023 +

Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Mar 21, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Jan 09, 2020
    Quiz Created by
    Kernsshanice

Recent Quizzes

Variable Life Insurance Policy Quiz - Every Agent must know this Variable Life Insurance Policy Quiz - Every Agent must know this
Variable Life Insurance- Agent Licensing Exam Prep Test Variable Life Insurance- Agent Licensing Exam Prep Test
Group Life Insurance Quiz: MCQ! Group Life Insurance Quiz: MCQ!
Chapter 1: Basic Principles of Life and Health Insurance Chapter 1: Basic Principles of Life and Health Insurance
Life Insurance Quiz MCQ Test! Life Insurance Quiz MCQ Test!
Allstate Life Insurance Company! Trivia Questions Quiz Allstate Life Insurance Company! Trivia Questions Quiz
Back to Top Back to top
Advertisement
×

Wait!
Here's an interesting quiz for you.

We have other quizzes matching your interest.