The nonforfeiture clause may also become available when the holder of a whole life insurance policy surrenders the policy. D) Reinstatement, A whole life policy option where extended term insurance is selected is called a(n), A) dividend option Individual insurance 2. C) completely and permanently disabled Discover your next role with the interactive map. How are surrender charges deducted in a life policy with a rear-end loaded provision? B) military service A double indemnity benefit will be payable to Matts beneficiary if Matt, A) is killed while committing a felony N is covered by a Term Life policy and does not make the required premium payment which was due August 1. D) Period of time after the premium is due but the policy remains in force, D) Period of time after the premium is due but the policy remains in force, All of these are common exclusions to a life insurance policy EXCEPT, A) accidental death When an accidental death benefit is added to a whole life policy, how does this affect the policys cash value? One of the questions on the application asks if P engages in scuba diving, to which P answers "No". Ron has a life insurance policy with a face value of $100,000 and a cost of living rider. Standard life insurance and long-term care insurance policies may have a nonforfeiture clause. Which military service exclusion clause would pay upon his death? C) Nonforfeiture provision Life Income, Which of the following Dividend options results in taxable income to the policyowner? Diffusion Let us complete them for you. Diffusion Let us complete them for you. D) $4,000 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. B) Paid-up additions D) Allows the insured to convert a term life policy to whole life with no evidence of insurability, B) Purchase additional coverage with no evidence of insurability required, Loans obtained by a policyowner against the cash value of a life insurance policy, A) are treated as taxable income D) Life income annuity. Extended Term Reduced Paid-up Cash Surrender Life Income. Surrendering the policys cash value Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options? Mike buys a 10-year renewable term policy. b) Interest only Nonforfeiture values include cash surrender, extended term and reduced paid-up. \text { Accounts Receivable } & 15,900 & \\ \hline \text { Cash } & \$ 3,100 & \\ An insured is past due on his life insurance premium, but is still within the Grace Period. C) $2,000 The cash surrender value will also be reduced by any outstanding loan amount. Whole Life Insurance: Whats the Difference? C) Entire Contract C) accelerated benefit rider D) Nonforfeiture options. The nonforfeiture benefit is designed to ensure that if you lapse your policy (i.e., stop paying premiums) after a specified number of years, you retain some benefits from the policy. Cash Surrender, A Return of Premium life insurance policy is. 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. All of the following are true regarding a decreasing term policy EXCEPT The insured's premiums will be waived until she is 21. Five years later, T commits suicide. Sheila would like to purchase a cash value life insurance policy. B) One year term B) Policy loans Azanswer team is here with the correct answer to your question. All of the following are TRUE statements regarding the accumulation at interest option EXCEPT The interest credited under this option is not taxable since it remains inside the insurance policy. Which of these would limit a companys liability to provide insurance coverage? During the claim process, the insurer discovers that L had understated her age on the application. All of the following are dividend options EXCEPT: Fixed-period installments. Which of the following provisions guarantees that premiums will be waived if a Juvenile Life policyowner becomes disabled? Insurance Exam Review Questions Flashcards | Chegg.com All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT. Which of these describe a participating life insurance policy? ", NAIC.org. Sometimes, a policy expires after a so-called grace period. A Tax deductible. The correct answer is "Automatic Premium Loan Option". B) pilot of personal airplane Which of these is NOT a type of agent authority? computer. Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value. What action can a policyowner take if an application for a bank loan requires collateral? D) hazardous occupations. Which of these is NOT a characteristic of the Accelerated Death Benefit option? All of the following life insurance policies develop a cash value EXCEPT term life insurance. B) Disability income rider 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. Rapid depletion of proceeds can be avoided B) $800 Forfeiture is broadly defined as the loss of property for failing to obey the law, and that property is generally lost to the state. o paid - up additions extended term insurance . C) Reinstatement period \text { Prepaid Rent } & 9,500 & \\ If thats the case, you dont have to worry anymore. A) Policy What is an insurer required to do when faced with an error made under the Misstatement of Age provision? Which military service exclusion clause would pay upon his death? The business pays the premiums that are not deductible, but the death is free from income taxes. You can learn more about the standards we follow in producing accurate, unbiased content in our. Ss attained age 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. Change the beneficiary, if revocable, Modify a provision in the insurance contract. B) The policy may be paid up early by using policy dividends C) 3/4 of the policys face amount Nonforfeiture Definition & Meaning - Merriam-Webster He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. A) The policy may be paid up early by using accumulated cash values Which of these require an offer, acceptance, and consideration? A criminal conviction is required for civil forfeiture. Which of the following statements is (are) true regarding life insurance policyowner dividends? Term vs. Which of the following statements is true? B) Waiver of premium rider C) resubmit a new life insurance application a) The company b) The insured c) The agent d) The counselor. Life insurance is a contract in which an insurer, in exchange for a premium, guarantees payment to an insureds beneficiaries when the insured dies. h. Supplies. Which of the following statements is TRUE? D) Nonforfeiture clause. D) Waiver of premium, An endorsement found in an insurance plan which modifies the provisions of the policy is called a(n), A) attachment What does the ownership clause in a life insurance policy state? B) Nonforfeiture I hope you got the correct answer to your question. A) The original face amount will be paid to the beneficiary Only the beneficiary may select, In a Life insurance contract, an insurance companys promise to pay stated benefits is called the. D) experiencing financial hardship. Past-due interest on a policy loan is added to the total debt B) Juvenile waiver For example, if you purchase a policy when you were 20 and you paid until age 55, you would receive a term policy that is less than 35 years. All of the following are optional methods of settlement after the insured has died EXCEPT. C) all remaining cash values are paid to the policyowner reduced paid-up insurance. All of these would be factors that determine how much coverage can be purchased EXCEPT