question
Which of these provisions require proof of insurability after a policy has lapsed?-Insuring -Conversion -Reinstatement -Consideration
answer
-Reinstatement
question
The Consideration clause in a life insurance policy indicates that a policyowner's consideration consists of a completed application and-the initial premium -agreeing to a physical examination -delivery of policy -disclosure of any medical conditions
answer
-the initial premium
question
What action will an insurer take if an interest payment on a policy loan is not made on time?-cancel the policy if not paid within the grace period -automatically add the amount of interest due to the loan balance -subtract from any dividends owed -disallow any further loans
answer
-automatically add the amount of interest due to the loan balance
question
When an insurer issues a policy that refuses to cover certain risks, this is referred to as a(n)-elimination -exclusion -limitation -exception
answer
-exclusion
question
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?-Policy Exclusion -Incontestable -Entire Contract -Assignment
answer
-Entire Contract The entire contract provision, found at the beginning of the policy, states that the policy document, the application (which is attached to the policy), and any attached riders constitute the entire contract. Nothing may be incorporated by reference, meaning that the policy cannot refer to any outside documents as being part of the contract.
question
The incontestable clause allows an insurer to-disallow a change of ownership throughout the Contestable period -disallow a change of beneficiary during the Contestable period -contest a claim at anytime if the cause of death was accidental -contest a claim during the contestable period
answer
-contest a claim during the contestable period
question
Which of these is NOT considered to be a right given to a policyowner?-Surrendering the policy's cash value -Modify a provision in the insurance contract -Assignment of ownership -Change the beneficiary, if revocable
answer
-Modify a provision in the insurance contract
question
T took out a $50,000 life insurance policy with an Accidental Death and Dismemberment rider. Five years later, T commits suicide. How much will the insurer pay?-The total premiums paid minus any policy loans -Nothing -$50,000 -$100,000
answer
-$50,000
question
B owns a Whole Life policy with a guaranteed insurability option that allows him to purchase, without evidence of insurability, stated amounts of-additional Term Life coverage at any time -additional Term Life coverage at specified intervals -additional Whole Life coverage at any time -additional Whole Life coverage at specified times
answer
-additional Whole Life coverage at specified times
question
P purchases a $50,000 term life insurance policy in 2005. One of the questions on the application ask if P engages in scuba diving, to which P answers No. The policy is then issued with no scuba exclusions. In 2010, P takes up scuba diving and dies in a scuba-related accident in 2011. What will the insurer pay to P's beneficiary?-Premiums paid plus interest -Nothing. Claim will be denied -$50,000 minus any outstanding policy loans -$100,000 because the cause of death was accidental
answer
-$50,000 minus any outstanding policy loans
question
S buys a $10,000 Whole Life policy in 2003 and pays an annual premium of $100. S dies 5 years later in 2008 and the insurer pays the beneficiary $10,500. What kind of rider did S include on the policy?-Accelerated death benefit rider -Return of premium rider -Family income rider -Term rider
answer
-Return of premium rider
question
D was actively serving in the Marines when he was killed in an automobile accident while on leave. His $100,000 Whole life policy contains a War Exclusion clause. How much will D's beneficiary's receive?-Refund of premiums paid plus interest -Nothing, due to actively serving in the armed forces -Double the face amount because cause of death was accidental -The full face amount
answer
-The full face amount
question
In a Life insurance contract, an insurance company's promise to pay stated benefits is called the-Insuring clause -Consideration clause -Entire Contract -Owner's rights
answer
-Insuring clause
question
N is covered by a Term Life policy and does not make the required premium payment which was due August 1. N dies September 15. What action will the insurer take?-Claim will be denied -Claim will be paid in full -Claim will be partially paid -Claim will be decided by an arbitrator
answer
-Claim will be denied
question
What does the insuring agreement in a Life insurance contract establish?-An insurer's basic promise -The insurance policy's grace period -An insurer's required reserve amount -The obligations of the beneficiary
answer
-An insurer's basic promise
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