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You are watching: All of these statements concerning settlement options are true except

Which the the complying with statements about the property of a life insurance plan is (are) true?

Under the property clause, the policyholder and beneficiary same share every contractual legal rights in the plan while the insured is living. The policyholder deserve to designate a new owner by submit an appropriate type with the insurance money company. A) I just B) II only C) both I and II D) neither i nor II

Which the the following statements around the entire contract i is true?

A) It enables the insurer to change the policy terms there is no the insured"s consent. B) It mentions that every statements in the applications are thought about warranties. C) It specifies that the life insurance allowance policy and the attached applications constitute the complete agreement between the parties. D) It prevents the insurance firm from contesting a plan after that has been in force for 2 years during the lifetime of the insured.

Which of the complying with would be a valid reason for one insurer to dispute a plan after the contestable duration has ended?

A) The policyholder do a product misrepresentation in the applications process. B) The insurer"s loss proportion is running higher than the insurer anticipated. C) The applicant had someone else take the medical examination required for plan approval because that her. D) The policyholder surprise a material truth at the moment of application.

Amy to buy a life insurance plan with the will of committing suicide to pay all the debts that were burdening she family. If she commits self-destruction 9 month after the plan is purchased, and also the insurer is able to prove the her death was a suicide, just how much will certainly be payment by the insurance money company?

A) nothing, because the plan is void B) the premiums paid because that the policy C) the policy"s cash value D) the challenge value that the policy

Which that the adhering to statements around the grace period in a entirety life insurance allowance contract is (are) true?

The objective of the grace period is to protect against the policy from lapsing by giving the policyowner added time to pay an overdue premium. If the insured dies throughout the grace period, the death advantage is lessened by 50 percent. A) I just B) II just C) both I and II D) neither ns nor II

All of the complying with statements around the demands to reinstate a lapsed life insurance policy are true EXCEPT

A) evidence of insurability is required. B) The slide away must have actually resulted from various other than the surrender the the policy for the cash value. C) all overdue premiums should be paid together with interest native the premium due dates. D) over there is no time border on when the policy might be reinstated.

Bert to buy a life insurance plan 4 years ago. That inadvertently declared that he was 1 year younger 보다 his yes, really age. If Bert die today, how much will certainly the insurance agency pay?

A) nothing B) less than the policy confront value C) the policy confront value D) more than the policy confront value

Which of the following statements around beneficiary designations is (are) true?

The major beneficiary is entitled to the death proceeds the a life insurance policy just if the arbitrarily beneficiary dies before the insured. If a revocable beneficiary designation is used, the insured must obtain the beneficiary"s permission of exercise most policy rights. A) I only B) II only C) both I and II D) neither i nor II

A arbitrarily beneficiary in a life insurance money policy has the appropriate to

A) obtain the policy proceeds if the primary beneficiary dies before the insured. B) re-superstructure the policy proceeds v the main beneficiary. C) change the beneficiary designation under mentioned circumstances. D) exercise policy rights if the insured is incapacitated.

Which that the complying with statements around the adjust of arrangement provision in a life insurance allowance contract is (are) true?

A change to a reduced premium policy results in a refund of the distinction in the cash worths of the 2 policies. A change to a greater premium plan requires evidence of insurability. A) I only B) II only C) both I and also II D) neither i nor II

Which of the complying with statements around the assignment the a life insurance plan is true?

A) The insurer have to be educated of any assignment or the fatality proceeds will be payment to the called beneficiary. B) Under an pure assignment, the just right moved to a brand-new owner is the right to adjust the beneficiary designation. C) As long as a collateral assignment exists, a creditor will receive the whole death benefit even if the loan has been repaid. D) Assignment might be made just with the permission the the insurer and the beneficiary.

Which that the complying with statements about the assignment of a life insurance plan is (are) true?

Under a collateral assignment, the policyowner assigns a life insurance plan to for sure a loan. Under an pure assignment, only limited ownership rights in a policy are transferred. A) I just B) II just C) both I and II D) neither i nor II

The transport of all ownership civil liberties in a life insurance money policy can be achieved through a(n)

A) pure assignment. B) irrevocable beneficiary designation. C) incontestable clause. D) participating-policy provision.

Which that the adhering to statements about life insurance policy loans is true?

A) loan are only permitted for particular reasons provided in the policy. B) They are forgiven if the insured dies prior to the loans are repaid. C) The policyholder must pay attention on a life insurance policy loan. D) They should be repaid top top the communication of a schedule established at the time of the loan.

Which of the adhering to statements is true regarding an automatically premium loan provision?

A) Its objective is to avoid a policy from lapsing since of nonpayment of premium. B) interest does not have to be paid on an automatically premium loan. C) If the delivery is used, the insured must present evidence the insurability to resume continual premium payments. D) An automatic premium loan, uneven a consistent policy loan, is forgiven if the insured dies before the loan is repaid.

What significant feature distinguish a participating plan from a nonparticipating policy?

A) the accessibility of a waiver-of-premium provision B) the visibility of settlement choices C) the payment of dividend D) the method by i m sorry beneficiaries have the right to be named

Sources that life insurance dividends incorporate which of the following?

Excess interest earned on the assets vital to keep legal make reservation Favorable mortality endure A) I only B) II just C) both I and II D) neither i nor II

Which the the complying with is a common dividend option found in a participating life insurance policy?

A) diminished paid-up insurance money B) fixed duration C) paid-up additions D) life earnings

Which that the following statements around dividend choices is (are) true?

The attention on dividends left come accumulate v the insurer is not thought about to it is in taxable income. Paid-up enhancements are extr units of totality life insurance. A) I only B) II just C) both I and II D) neither ns nor II

Advantages of picking the paid-up enhancements dividend alternative in a life insurance allowance policy include which of the following?

proof of insurability is not required to purchase extr insurance. The enhancements are purchased in ~ net rates without a loading for expenses. A) I just B) II only C) both I and II D) neither ns nor II

Which of the following dividend options, sometimes dubbed the “fifth dividend option,” is not available by all insurers that offer participating life insurance money coverage?

A) paid-up additions B) reduction of premiums C) buildup of dividends at attention D) hatchet insurance

All the the adhering to are nonforfeiture alternatives found in cash value life insurance plans EXCEPT

A) cash value. B) reduction of premiums. C) lessened paid-up insurance. D) extended term insurance.

Which of the complying with statements about nonforfeiture options found in life insurance plans is true?

A) Under the reduced paid-up option, the paid-up policy is ax insurance. B) Under the expanded term option, the amount of term insurance is less than the face value of the surrendered cash value policy. C) Under the decreased paid-up option, no additional premiums need to be paid. D) unless the policyowner has selected an additional nonforfeiture option, the cash value choice goes into effect automatically.

All of the adhering to statements about the attention settlement option are true EXCEPT

A) The minimum guarantee interest rate is commonly equal come the prime rate. B) The interest can be paid monthly, quarterly, semiannually, or annually. C) The beneficiary may be enabled to withdraw component or all of the proceeds. D) The beneficiary might be permitted to adjust to one more settlement option.

Which of the adhering to statements around life insurance allowance settlement alternatives is true?

A) Under the fixed period option, the beneficiary generally has the right to do partial withdrawals in instance of emergency. B) Under the fixed period option, any kind of remaining proceeds revert come the insurer if the beneficiary dies before the end of the fixed period. C) Under the fixed amount option, the beneficiary can be offered the right to increase or decrease the fixed amount. D) Under the fixed amount option, any kind of interest credited in excess of the guaranteed rate increases the quantity of each periodic payment.

Which of the following statements around life income settlement alternatives is (are) true?

Under a joint-and-survivor life earnings option, payments stop at the death of the first annuitant. Under a life earnings with guarantee period, a random beneficiary is guarantee a minimum variety of payments nevertheless of once the primary beneficiary dies. A) I just B) II just C) both I and II D) neither ns nor II

Disadvantages of life insurance settlement options include which of the following?

higher yields can regularly be obtained elsewhere. Life income choices have restricted usefulness at younger ages. A) I only B) II just C) both I and II D) neither ns nor II

Which the the adhering to statements about the waiver-of-premium supplication in life insurance allowance is true?

A) due to the fact that the probability of ending up being disabled above the probability of premature birth death, the expense to encompass this supplication is generally prohibitive at younger ages. B) Premiums space usually waived if the insured becomes partly disabled. C) Life insurance money protection proceeds in force throughout a duration of disability, yet dividends cease and cash values space reduced. D) The handicap must occur before a declared age, such as 65, for premiums to it is in waived.

All of the following are requirements that have to be satisfied before premiums room waived under a waiver-of-premium supplication EXCEPT

A) The insured have to furnish proof of impairment to the insurer. B) The insured need to be disabled prior to some specified age, together as period 60 or 65. C) The insured must satisfy the definition of disability. D) The insured must satisfy a 2-year waiting period.

Which that the following statements around the guarantee purchase option is true?

A) one insured usually has 24 months to exercise an option. B) The alternative cannot be worked out until the insured reaches age 40. C) The lot of life insurance allowance that have the right to be purchased in ~ each option is minimal to 10 percent the the confront amount the the basic policy. D) The additional coverage can be purchased there is no demonstrating insurability.

Which the the adhering to statements around the guaranteed purchase option is true?

A) the is usually available with ax insurance policies. B) The premium when an choice is exercised is based on the insured"s age at the time the original policy was issued. C) The choice permits the insured to acquisition specified quantities of life insurance in the future also if the insured has come to be uninsurable. D) If a guaranteed purchase option expires without gift used, it can be exercised at a later on date.

Which of the adhering to statements about a usual accidental death benefit rider is (are) true?

inadvertently injury have to be the reason of fatality for the increased advantage to be paid. The accidental fatality must happen prior to part specified age for the increased advantage to it is in paid. A) I only B) II only C) both I and II D) neither i nor II

Reasons for no purchasing an accidental death benefit rider incorporate which the the following?

Most world die together a an outcome of a disease rather than from one accident. The economic value the a human being life is not increased if fatality occurs due to the fact that of one accident. A) I just B) II only C) both I and II D) neither i nor II

The cost-of-living rider typically bases increases in the policy challenge value on changes in the

A) gross national product. B) interest price for momentary U.S. Government securities. C) consumer price index. D) nationwide wage level.

Which that the complying with statements about accelerated fatality benefits riders is (are) true?

The benefit paid is usually less than the full face amount. Several different medical problems may cause the payment that benefits. A) I just B) II only C) both I and II D) neither ns nor II

The exercise of buying the life insurance plan of a terminally ill insured at a discount is referred to as a

A) collateral assignment. B) viatical settlement. C) catastrophic disease conversion. D) grace period transaction.

Al was called the beneficiary in his mother"s life insurance policy. His mother passed away during the contestable period. The insurer refuse payment, citing a material misrepresentation ~ above the application. Al believes the insurer should pay the claim because the misrepresentation emerged on the application, and the application is not part of the formal agreement in between the insurer and also the policyholder. Which provision protects the insurer by making the application component of the formal agreement in between the parties to the contract?

A) incontestable i B) whole contract clause C) ownership i D) reinstatement clause

Cal purchased a totality life plan 6 years ago. The plan requires yearly premium payments. Cal forgot to salary the premium the was due 2 main ago. He wonders if his life insurance is tho in force. I beg your pardon life insurance policy provision is designed to save the policy in force for a quick time also if the premium payment is late?

A) waiting period B) grace period C) guaranteed purchase alternative D) reinstatement clause

Bruce lied about his health history when that purchased a life insurance money policy. He died 3 years after the plan was issued. Which life insurance policy provision will call for the life insurer to pay the beneficiary even though Bruce lie on the application?

A) incontestable clause B) entire contract i C) ownership clause D) change-of-plan supplication

Which life insurance policy provision states that it is the policyholder, and also not the insured or beneficiary, who possesses every contractual rights while the plan is in force?

A) nonforfeiture alternatives B) entire contract i C) incontestable i D) ownership clause

Becky is considering the acquisition of a entirety life policy on her very own life. She is pertained to that if she i do not care disabled, paying premiums will end up being a burden. Which provision deserve to Becky connect to her life insurance policy to address this concern?

A) guarantee purchase option B) waiver-of-premium delivery C) inadvertently death benefit rider D) accelerated death benefits rider

Tim to buy a 10-payment totality life insurance plan 15 year ago. Tim would like to donate this paid-up policy to a charity. Under which policy provision have the right to Tim transfer all ownership rights in the policy to the charity?

A) absolute assignment B) prolonged term nonforfeiture option C) reinstatement D) collateral assignment

Beth purchased a participating life insurance policy 6 year ago. She life insurance allowance needs have actually increased, however she has developed a medical condition that provides it difficult for her to purchase an ext life insurance at affordable premiums. Which dividend choice makes sense for Beth come use provided her medical condition?

A) cash B) apply to premium C) dividend accumulations D) paid-up additions

Lionel to buy a $200,000 plain life insurance allowance policy when he to be 25 years old and also had far-ranging life insurance needs. Currently Lionel is 50. His mortgage is nearly paid-off and his kids have left home and also are financially independent. Lionel no longer wants to salary premiums, but he would choose to have some permanent life insurance allowance in force. Which nonforfeiture option can Lionel rental to satisfy these objectives?

A) cash value B) reduced paid-up insurance money C) paid-up enhancements D) extended term insurance money

Jane purchased a life insurance plan on her own life and named her daughter, Cheryl, as beneficiary. Cheryl has a history of not managing money well. Jane wants the death benefit paid to Cheryl in monthly installments end 20 years. Which negotiation option must Jane pre-select because that Cheryl?

A) lump amount B) fixed amount C) fixed duration D) interest option

Malcolm would like to acquisition life insurance. That is involved that he could need extr life insurance money in the future and also that he can be uninsurable at the time. What provision have the right to Malcolm include to his life insurance plan that will permit him to purchase added life insurance at stated times later without providing proof of insurability?

A) double indemnity rider B) guaranteed purchase option C) waiver-of-premium supplication D) accelerated death benefits driver

Which of the adhering to statements is (are) true concerning settlement options?

A straight life annuity provides the shortest amount the periodic income of all the life earnings options. Fixed-period and fixed-amount are life revenue options. A) I only B) II only C) both I and also II D) neither i nor II

Which the the complying with statements is (are) true worrying the automatically premium loan provision?

Unlike various other policy loans, attention is no charged on automatic premium loans. The an easy purpose the an automatically premium loan is to avoid a life insurance policy from lapsing. A) I just B) II only C) both I and also II D) neither i nor II

Life insurance policy proceeds deserve to be payment to a trustee ~ above the fatality of the insured. Every one of the complying with statements concerning payment the proceeds to a trustee are true EXCEPT

A) use of a trustee provides adaptability with regard come the timing and amount of the payments. B) Trustees are often used when the beneficiary is a minor kid or an adult with reduced mental capacity. C) The trustee is not permitted to accept a fee because that rendering services. D) The trustee does not guarantee invest results.

Which that the complying with statements is (are) true regarding exclusions in life insurance contracts?

Life insurance policies are substantial restrictive, including countless exclusions. A life insurer may exclude death attributable to details activities or hobbies discover on the application. A) I just B) II just C) both I and II D) neither i nor II

A life insurance allowance policyholder might no longer need life insurance. Such a policyholder might sell the policy to a third party for much more than that is cash value. The purchaser becomes the brand-new beneficiary and also is responsible for succeeding premium payments. Such a financial transaction is called a(n)

A) collateral assignment. B) accelerated death services rider. C) absolute assignment. D) life settlement.

A life insurance contractual delivery protects the beneficiary by not permitting the insurer come introduce exterior information to refuse payment the the claim. Such outside information could be notes the the agent take it while the insured perfect the application. This contractual provision is the

A) entire contract clause. B) incontestable clause. C) reinstatement clause. D) change-of-plan provision.

Which the the following is a conventional nonforfeiture option?

A) paid-up additions B) life revenue C) expanded term insurance money D) palliation of premiums

Which the the following statements about life insurance plan loans is (are) true?

interest is not forced on a life insurance plan loan, as the policyholder is take out loan his or her own money. If over there is an excellent loan as soon as the insured dies, payment to the beneficiary is decreased by the lot of the loan. A) I only B) II just C) both I and also II D) neither ns nor II

If a life insurance policy lapses for nonpayment that premiums, and also the policyholder has not elected one more option, i m sorry nonforfeiture choice usually goes into effect in many policies?

A) reduced paid-up insurance money B) one-year hatchet insurance C) expanded term insurance D) payment the cash value

Which the the adhering to statements regarding the inadvertently death benefit rider (also known as double indemnity) is true?

A) including the inadvertently death benefit rider doubles the premium because that the policy. B) financial planners agree that adding the inadvertently death benefit rider is a way purchase. C) The financial value the a human being life is doubled or tripled if fatality is caused by an accident, justifying the acquisition of the rider. D) The death advantage is doubled just if an inadvertently injury is the direct cause of death and also death occurs prior to a stated age.

Easy salary Life Insurance company allows a hatchet insurance driver to be included to its entirety life policies. The result is a policy that provides an enhanced death benefit with an affordable premium. The general name because that such a plan is a(n)

A) blended policy. B) indexed policy. C) joint life policy. D) sweetheart policy.

Which statement around the incontestable i is true?

the protects the beneficiary if the insurer tries to refuse a claim years after ~ the policy is issued. If protects the insurer from having actually to salary a claim during the an initial two year if the insured made a material misrepresentation or covert material details in the application. A) I only B) II only C) both I and II D) neither i nor II

Marcus is involved that inflation will certainly erode the purchasing strength of the confront value that his life insurance allowance policy. His agent argued that Marcus include a provision that permits him to purchase one-year term insurance equal to the percentage adjust in the customer price table of contents without having actually to show insurability. This provision is referred to as a(n)

A) cost-of-living rider. B) guaranteed purchase option. C) increased death advantage rider. D) waiver-of-premium rider.


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Janet is the beneficiary of her uncle’s $200,000 life insurance allowance policy. As soon as her uncle died, Janet selected a settlement alternative that pays monthly benefits for as long as she lives. If Janet dies before receiving $200,000, payments will continue to a arbitrarily beneficiary until a total of $200,000 has actually been paid. What settlement alternative did Janet select?

A) joint-and-survivor annuity B) life earnings with guaranteed total amount C) life income with guaranteed duration D) fixed amount option