Terms in this set (40)
All of the above
Which of the following are settlement options that a beneficiary might choose in the event that the insured has died an not designated any settlement option?
Cash,pay the full face amount of the policy.
Interest only paid on the death benefit amount or until another option is chosen.
A Fixed Time, Fixed Amount option or one of the life income options
All of the above
If a policy is lapsed or surrendered the insured may elect which of the following options?
Reduced Paid-Up coverage
All of the above
An insured may select which of the following dividend options should the insurer declare a dividend?
Cash or accumulate the dividend at interest
Apply the dividend to reduce the premiums
Apply some of the additions to buy paid up additions and the rest to one-year term coverage.
Twice the face amount is paid with a deduction equal to the size of the policy loan
If a policy contains an accidental death benefit and the insured also has an outstanding policy loan, in the event of accidental death
Within 3 years after the policy lapses
A lapsed policy may usually be reinstated
The settlement option under which the principal never decreases unless the beneficiary withdraws it is the
Term coverage equal to that of the original policy with premiums based on the insured's attained age
The extended term nonforfeiture option provides
Joint and Survivor income life option
When Sam, a widower, dies, his sons Mack and Jack share a monthly check of $2,000. Mack dies and Jack continues to receive a check for $1,000 until he dies. This life income settlement option is called
More policy owners
Each of the following is a source of life insurance policy dividends EXCEPT
All of the above
Amounts paid out under the accelerated benefit rider:
Are authorized to pay expenses associated with a terminal illness
Are deducted from the policy's death benefit
Can be used to pay expenses in a nursing home
A higher premium than a nonparticipating policy
A participating policy is likely to have which of the following?
Pay the beneficiary $20,000 after subtracting the amount of the outstanding loan
If and insured has an outstanding loan of $5,000 on a policy with a face amount of $25,000 at death, the company will
Is generally charged interest
Money provided under the automatic premium loan provision
Prinicpal amount gradually decreases to zero
Under the provisions of the fixed period settlement option, the
Will automatically institute the extended term option
An insured allows a permanent policy to lapse. Unless otherwise instructed, the insurance company
The entire accumulated cash value of $6,000 less interest for one year
If a policy owner has a $100,000 policy with an accumulated cash value of $6,000, the policy owner can borrow up to
dividend earned, but not yet paid, in the year of the insured's death and paid with the death claim
What is postmortem dividend?
If the outstanding loan balance, plus interest, equals or exceeds the cash value of the policy, the company could cancel the insurance
Why should a policy owner be especially careful when deciding to increase the amount of an outstanding policy loan?
Must look elsewhere for holiday money
Arthur purchased a $100,000 policy naming his wife Louise as primary beneficiary and his only son Michael to receive any proceeds if Louise dies before Authur or if he dies after Arthur but before receiving all ot the policy proceeds. Authur elected the interest only option for Louise,with the right of withdrawal after 5 years. No settlement option was stated for Michael. Arthur dies May 6,1990. In November, of 1994, Louise is laid off of work. With Christmas approaching, Louise wants to withdraw $1,500 from the insurance company to cover holiday expenses. Louise
Can be withdrawn without effecting the cash value of the policy
Dividends left to accumulate at interest
extended term option
The nonforfeiture option that provides the most life insurance protection is the
Length of the fixed period, face amount of the policy, and interest
The factors that determine the amount of each payment under the fixed period settlement option are
A policy owner allows a policy to lapse and the insurance company converts the policy to the extended term option. Which of the following from the original policy will automatically carry over into the new policy
Paid-up additions options
Using the policy dividends as a single premium to buy additional life insurance is called the
Michael, in any manner he choses
Arthur purchased a $100,000 policy naming his wife Louise as primary beneficiary and his only son Michael to receive any proceeds if Louise dies before Arthur or if she dies after Arthur but before receiving all of the policy proceeds. Arthur elected the interset only option for Louise with the right to with draw after 5 years. No settlement option was stipulated for Michael.Soon after purchasing her new car, Louise is involved in a fatal accident. The remaining proceeds of the insurance policy will be paid to
Policy loans can be made with both term and permanent policies (T/F)
Fixed period option
The settlement option that provides for the proceeds plus interest to be paid in installments for a specified period of time is the
May withdraw the 15,000 or more if she choses
Arthur purchased a $100,000 policy naming his wife Louise as primary beneficiary and his only son Michael to receive any proceeds if Louise dies before Arthur but before receiving all of the policy proceeds. Arthur elected the interest only option for Louise with the rights of withdrawal after 5 years. No settlement option was stipulated for Michael. Arthur dies May 6,1990. Louise's vintage automobile gasps its last breath on July 4, 1996, and Louise decides $15,000 will be adequate to purchase a newer model. Louise
Dillon has a $50,000 policy with cash values of $10,000. A $2,000 loan is outstanding, as well as a past-due premium of $1,000. Dillon finds he can no longer make premium payments on this policy. If Dillon chooses the cash surrender value option, he will receive
All back premiums due plus interest have been repaid and less than three years have elapsed
Once a policy has lapsed, the insured usually can reinstate the policy, provided proof of insurability is shown, if
The policy's third year
In many jurisdictions, permanent policies are required to have some cash value by the end of
Interest in periodic payments to Louise
Arthur purchased a $100,000 policy naming his wife, louise, as primary beneficiary, and his only child Michael, to receive any proceeds if Louise dies before Arthur, or if she dies after Arthur but before receiving all of the policy proceeds Arthur elected the interest settlement option for Louise, with the right of withdrawal after five years. No settlement option was stipulated for Michael. Arthur dies May 6, 1990. Arthur's insurance company will make settlement by paying?
the amount the cash value would purchase minus the $5,000 loan
A life policy has a $500 premium outstanding and a $5,000 loan,if the reduced paid-up non-forfeiture option were used how much coverage would exist?
That amount, when increased by future premiums on outstanding policies, and interest on those premiums, will enable the company to meet future death claims
Which statement describes the term policyholder reserve?
The cash value on the policy itself
Collateral for a policy loan is
The payment of the proceeds of a policy in other than a lump-sum cash payment is called a
The cash value of a permanent life insurance policy can be used for all of the following EXCEPT
Be applied to the premium due
If the policy owner has chosen the reduced premium dividend option, dividends will
$49,500 which is the face amount less the premium due
Adelaide dies without having paid the $500 premium on her $50,000 policy that was due a week before her death. With no outstanding policy loans, Adelaide's beneficiary can expect to receive
The policy's share of the company's excess funds or divisible surplus
What is a life insurance policy dividend ?