Policy options & riders – Lesson 5 Flashcards

0
Q

Accidental death benefits provides for an additional payment when an insured dies within a stated time after and as a result of an accident. In most cases, how much will be insurer pay?

A

Double the face amount of the policy.

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1
Q

An insurer pays a refund from the surplus of profits to the holder of a participating policy. What is this payment?

A

A policy dividend

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2
Q

What are some of the nonforfeiture options?

A
  1. Cash surrender
  2. Reduced paid up
  3. Extended term
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3
Q

Which of the nonforfeiture options will provide the longest period of protection?

A

Reduced paid up

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4
Q

Which of the nonforfeiture options provides the most dollar amount of protection?

A

Extended term

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5
Q

The insurer could use the values from the nonforfeiture options to pay the insurance premium. True or false?

A

False

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6
Q

What type of an insurer issues participating policies?

A

Mutual company

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7
Q

What are dividends?

A

Regarded by the government as return of excess premium charged the policy owner.

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8
Q

Dividends are paid from the mutual insurers surplus and cannot be guaranteed. True or false?

A

True

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9
Q

The dividend option selected by a policyholder, in which a different type of insurance from the original policy purchased, is called:

A

One year term

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10
Q

Who is allowed to select a settlement option?

A

Policyowner

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11
Q

Settlement option in which the beneficiary receives a prescribed amount consisting of principal and interest until the entire amount is exhausted is referred to as:

A

Fixed amount

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12
Q

Regarding the accidental death rider; the double benefit will not be paid if there is an outstanding loan against the policy. true or false?

A

False

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13
Q

Regarding the accidental death rider, the insured must die within how many days of suffering the accident?

A

Within 90 days

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14
Q

What provision allows the insured to buy more insurance at stated intervals without proof of insurability?

A

Guaranteed insurability rider

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15
Q

Regarding the waiver of premium rider: does additional premium for the rider affect the cash value of the policy?

A

No

16
Q

Regarding the waiver of premium rider: what is the normal waiting period?

A

Six months

17
Q

The cost of living rider might be added to a whole life policy so the whole life policy has a constant face amount of insurance. True or false?

A

True

18
Q

Regarding juvenile policy, a policyholder should consider adding what type of rider?

A

Payor benefit rider

19
Q

A disability income rider provides periodic payments to the insured while suffering a disability due to sickness or accidents. True or false?

A

True

20
Q

What are the five most common dividend options?

A
  1. Cash
  2. Reduce premium
  3. Accumulates at interest
  4. Paid-up additional insurance
  5. One year term
21
Q

Dividends are usually paid annually after a policy has been in force for how long?

A

A year or two

22
Q

In an Accumulate at interest dividend option, the interest-rate is usually a guaranteed minimum. True or false?

A

True

23
Q

What is the reason for the one-year term in the dividend option?

A

To keep the total amount of insurance equal to the face amount when there is a loan against the policy.

24
Q

What are the four settlement options?

A
  1. Interest only option
  2. Fixed period Option
  3. Fixed amount option
  4. Life income option
25
Q

The death benefit is paid to the beneficiary in a series of fixed amount installments until the proceeds plus interests are exhausted is which of the four settlement options?

A

Fixed amount settlement option