Term
| Is it true that the measure of liability, as stated in a life inurance policy, is the amount of insurable interest on the insured? |
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Definition
| no. Many people need more life insurance (based on a needs analysis or human life value calculation) but purchase a smaller amount |
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Term
Regarding the 31 day grace period found in life insurance policies, These are ALL FALSE statements:
*the policy holder has 31 days to review the policy
*The premium must be paid within 31 days to review the policy
*If the insured dies within 31 days after issue, the claim will not be paid. |
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Definition
| None of the choices describe the grace period |
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Term
| what does the "grace period" in a life insurance policy permit the insrued todo after the premium due date? |
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Definition
| Pay the premium without loosing coverage. The purpose of the grace period is to keep the policy on the books without a lapse in coverage |
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Term
| Cash value policies containloan provisions stating the insruace company willlend an amount that cannot be more than the cah value minus interest to the next policy anniversry. Which can also be found in these provisions? |
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Definition
| The owner can pay back the loan in full or in part at any time and the interest rate is specified in the contract. These are characteristics of how loans work on permanent policies. The #2 choice only occurs upon death of hte insured, and is not loaned, but taken out of the proceeds. |
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Term
| The insurer cannot void a policy because of concealment, fraud or misrepresentation by the insured after a stated period. What part of a life insurance policy states this? |
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Definition
| Incontestable clause. This is the definition of the incontestable clause |
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Term
| An assingment which transfers all "incidents of ownership" to another party is an |
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Definition
| absolute assingment. they key word in the question is all and an absolute assingment assings all |
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Term
| an irrevocable beneficiary: |
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Definition
| must provide their written approval for cash value loans. The purpose of an irrevocable beneficiary is so that no changes can be made to the contract without permission. If they give their permission, it must be in writing |
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Term
| A policy names an irrevocable beneficiary. This beneficiary type: |
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Definition
| "vested" because there is "invested" interest in the life contract.This word vested means that they have a particular interest in the contract ans they are to approve of everything that is done to the contract but they do not have the same role as a policy co-owner. |
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Term
| Equally sharing the death benefit among children can be done most effectvely by: |
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Definition
| a class beneficiary designation. Children are a beneficiary classificaiton. if the insured has 2 children or 12, they will all be treated equally under this designaiton unless the policyowner requests otherwise. |
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Term
| T/F The surviorship clause is not concerned with the question of medically determining if the insured or primary benefeciary died first. |
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Definition
| False. The whole purpose ofthis clause is to protect the beneficiaries so it presumes the insured died last. |
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Term
| All of the following examples of policy exclusions, frequently found in life insurance to reduce exposure to higher than average risk are suicide, aviation, war, but the following is not |
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Definition
| incontestability, which is never excluded. |
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Term
| T/F the beneficiary will receive a ful refund of premiums with a life contract containing a suicide clause if the suicide occurs 20 years after the policy issuance. |
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Definition
| false. The beneficiary onlygets the return of premiums if the insured dies by suidice within the first 2 years of the policy. if they comit suicuide afer 2 years, the beneficiary receives the full face amount. |
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Term
| T/F Because they are not of legal age, children are unable to be named as contingent beneficiaries on life insurance. Instead the contract must name a trust. |
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Definition
| false. Anyone including a trust can be named as a beneficiary. However children can not legally recieve the money until they are of legal age. |
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Term
| The settlement option stating that the principal will only decrease if the beneficiary makes withdrawls from it, is the: |
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Definition
| Interest-only option. ig only the interest is being the principal will never decrease |
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Term
| nonforgeiture provisions can be found in whole life policie. These provisions: |
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Definition
| Will afford a policy owner options for use of the cash value if he terminates his life policy.This is a description of how non-forgeiture provisions work. |
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Term
| Interest only IS or IS NOT a common non-forgeiture option. |
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Definition
| Is NOT. It is not a common non-forfeiture option, but it is a settlement option. |
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Term
| How can a policyholder's divident be received? |
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Definition
| paid in cash, draw interest, and reduce premiums. These are ways the policyholder can receive dividens. |
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Term
| An entity that has an unlimited life, and is owned by stockholders is a: |
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Definition
| corporations, which happen to live forever or until they are dissolved by the corporation. |
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