Both are in excellent health. For traditional whole-life policies, the policyholder decides how they would like to access the policys cash value. The Consideration clause in a life insurance contract contains what pertinent information? g. Salaries and Wages Expense Reduced Paid-Up P will still receive declared dividends C) the right to change a policy provision The extended-term insurance also helps the policy owner to quit paying premiums for the original policy, but retain the equity accumulated in the policy. Cash surrender value b. B) suicide B) dies of a stroke B) Age Standard life insurance and long-term care insurance may have nonforfeiture clauses. Must have a terminal illness to qualify. You have the following unadjusted trial balance for Rogers Corporation at December 31, 2019: RogersCoprorationUnadjustedTrialBalanceDecember31,2019\begin{array}{c} All of the following are dividend options EXCEPT: Fixed-period installments. Your email address will not be published. D) revoke an absolute assignment. Surrender Value: What's the Difference? Required fields are marked *, All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT. The same face amount as in the whole life policy. C) Cash value is surrendered to policyowner c) Reducation of Premium D) cost of living rider. B) Face amount of the new policy equals that of the original policy A) Reduction of premium dividend option What is the name of the provision which states that a copy of the application must be attached to the policy when issued? \text { Accumulated Dcprcciation } & & \$ 104,000 \\ A claimant wants to bring a recovery action against an insurance company for a loss claimed under a policy. a) The PPO won't pay any benefits b) Ron will have to pay a higher deductible c) The PPO will pay the same benefits as if Ron had seen a PPO physician. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. One life insurance policy provision specifies that the insurer cannot deny payment to the beneficiary because of concealment or misrepresentation if the life insurance policy has been in force for two years during the insured's lifetime. D) juvenile waiver rider, If an insured dies during the grace period with no premiums paid, A) the policy would be payable, minus the premium amount With the paid-up policy option, you can use your cash surrender value to buy a paid-up version of the same type of life insurance policy so you would no longer have to make premium payments. B) The policy will be voided with no death benefits paid D) The original death benefit listed on the policy minus any outstanding loans and interest, C) A prorated death benefit based on the amount of insurance the insureds premiums would have been if purchased at the correct age. Which type of rider will waive the premium on a childs life insurance policy if the parent paying the premium dies? B) guaranteed insurability rider 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. A) Insured becomes unemployed Fixed Amount N dies September 15. D) accidental death. Eric purchased a cash value life insurance policy six years ago. Their purpose is to protect the insured's accumulated cash values in case the Whole Life or Endowment policy lapses. Cash B) the beneficiary outlived the insured D) The benefit can be offered as a rider at a specific extra cost or may be at no cost, D) The benefit can be offered as a rider at a specific extra cost or may be at no cost. The following are the payout options outlined in the nonforfeiture clause of a whole life insurance policy: If a policy owner chooses the cash surrender value option, the insurer will pay the remaining cash value within six months. If D dies without making any further changes, to whom will the policy proceeds be paid to? The nonforfeiture benefits clause allows the owner to choose full benefits or partial benefits when the premium can no longer be paid starting after a certain number of years. a) Extended Term Insurance What does the ownership clause in a life insurance policy state? In personum actions are against the owner of property, whereas in rem actions are taken . Policy loans may still be made Learn how policy loans work and about their risks. The clause may involve returning some portion of the total premiums paid, the cash surrender value of the policy, or a reduced benefit based upon premiumspaid beforethe policy lapses. B) Ike may eventually take out a policy loan All of the following are nonforfeiture options, EXCEPT: Diffusion Let us complete them for you. C) Provides for the early payment of some portion of the policy face amount should be insured suffer from a terminal illness The beneficiary is Ds wife. Please check below to know the answer. D) Grace period. C) waiting period Plot the fitted values on the horizontal axis and the residuals on the vertical axis. D) Insured has become terminally ill. fixed-period option. Which of the following provisions guarantees that premiums will be waived if a Juvenile Life policyowner becomes disabled? Beneficiary will be paid the Death Benefit. She is concerned, however, that if she becomes disabled she will be unable to pay the premiums as they come due. Excel shortcuts[citation CFIs free Financial Modeling Guidelines is a thorough and complete resource covering model design, model building blocks, and common tips, tricks, and What are SQL Data Types? The extended-term payout option allows the policy owner to buy an extended-term policy using the cash values from the original policy. B) Extended term insurance B) would not be treated as taxable income Which of the following is a restatement condition? B) absolute assignment In most cases, the surrender cash value may be different from the cash value due to the policy owner. You can find out more about our use, change your default settings, and withdraw your consent at any time with effect for the future by visiting Cookies Settings, which can also be found in the footer of the site. Florida Laws and Rules Pertinent to Insurance, Life Insurance Policies - Provisions, Options, Fundamentals of Financial Management, Concise Edition, Daniel F Viele, David H Marshall, Wayne W McManus, Chapter 3 - Legal Concepts of the Insurance C. The term policy ends after a fixed number of years as detailed in the policys nonforfeiture table. The treatment is expensive and is not covered by Elaine's health insurance. Inability of the insured to perform more than 2 Activities of Daily Living (ADLs), The Accidental Death and Dismemberment (AD&D) provision in a life insurance policy would pay additional benefits if the insured. Coverage will be adjusted to reflect the insureds true age if a misstatement of age is discovered. B) accumulate without interest The Structured Query Language (SQL) comprises several different data types that allow it to store different types of information What is Structured Query Language (SQL)? In permanent life insurance, the policyholder will not lose the life insurance policy entirely. It is taxed as capital gains Insurance Exam Review Questions Flashcards | Chegg.com C) $2,000 C) Period of time after a policy is issued and before it is delivered to policyowner PDF Long-term Care Insurance B) automatic premium loan Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it? Work with our consultant to learn what to alter, Chapter 4- Policy Provisions, Options and Riders (Exam 2). \text { Retained Earnings, 12/31/2018 } & & 37,000 \\ D) Entire Policy, A provision that allows a policyowner to temporarily give up ownership rights to secure a loan is called a(n), A) automatic premium loan Georgia requires legal actions to be brought forth no sooner than 60 days and no later than 3 years after proof of loss. You can get your paper edited to read like this. Why would you not want to prepare financial statements Deducted based on the income level. Fixed Period Which of the following statements is TRUE? The Accelerated Death Benefit provision in a life insurance policy is also known as a(n), Which statement is TRUE in regards to a policy loan? He forgot to pay the premium that was due last week. B) Status D) Conditions. Recent Examples on the Web This relatively unknown nonforfeiture option is called a life settlement. Also, any outstanding amounts on the insured partys coverage are deducted from the cash value. Waiver of Premium C) The entire cash value is taxable This provision is the, All of the following are nonforfeiture options EXCEPT. Free Flashcards about Chapter 3 When does a life insurance policys waiver of premium take effect? Amount of premium payments and when they are due. All of the following are Nonforfeiture options EXCEPT A Extended term B Reduced paid-up C Interest only D Cash surrender `````C Interest only Which statement is NOT true regarding a Straight Life policy? Nonforfeiture Definition & Meaning - Merriam-Webster B) nonforfeiture option C) dies instantly from a car accident Her doctor said that her only chance of survival is an experimental treatment. These options include: If the policyholder does not choose any of the above options after the policy is terminated or surrendered, the insurance company will go for the payout option stipulated in the life insurance policy of the owner. P purchases a $50,000 whole life insurance policy in 2005. Irrevocable beneficiaries must give permission to the policyowner in order for the beneficiary to be changed. D) Cash dividend option. C) all remaining cash values are paid to the policyowner What action can a policyowner take if an application for a bank loan requires collateral? Accumulation at Interest B) the death benefit Paid-up additional insurance is whole life insurance that a policyholder purchases using the policys dividends. D) Full face amount. Under which nonforfeiture option will permanent life insurance coverage be in force after the nonforfeiture option is exercised? Meanwhile, theequity you built is used to purchase a term policy that equals the number of years you paid premiums. C) Suicide clause Also, the amount of reduced paid-up or extended-term insurance may decrease if a policys sub-account performance is poor or credited interest rates are low. f. Six months interest at 8% on the note was paid on September 30. Reduce your coverage for the remaining term of the policy and pay no futurepremiums. What will the beneficiary receive if the insured dies during this Grace Period? B) The insurers obligation to return all premiums upon an approved death claim Let us have a look at your work and suggest how to improve it! Just like with a conventional loan, youll be charged interest that could range from 5% to 9% on the loan. M had an annual life insurance premium payment due January 1. All of the following are Nonforfeiture options EXCEPT a) Reduced paid-up b) Interest only c) Cash surrender d) Extended term. Cash Value vs. A) A return of excess premium and partially taxable A) Bank loans D) war. All of the following statements are true EXCEPT, A) Mikes policy will develop no cash value over the policys term 40% taxable, similar to a capital gain B. You are eligible for the reduced "paid up" contingent nonforfeiture benefit when all three conditions shown below are met: The premium you are required to pay after the increase exceeds your original premium by the same percentage or more shown in the chart below; Triggers for a Substantial Premium Increase Issue Age Under 65 65-80 Over 80 Thanks for choosing us. An automatic premium loan is not considered a Nonforfeiture Option. There are no guarantees for the minimum amount of life insurance available in variable and universal life policies, which allow for variable investing. Which of these is NOT a characteristic of the Accelerated Death Benefit option? Forfeiture (law) - Wikipedia All of the following life insurance policies develop a cash value EXCEPT term life insurance. B) No interest will be charged on loan balance B) The policy may be paid up early by using policy dividends Whole life insurance is permanent life insurance that pays a benefit upon the death of the insured and is characterized by level premiums and a savings component. Standard life insurance and long-term care insurance policies may have a nonforfeiture clause. c. What is your commission? All of the following are optional methods of settlement after the insured has died EXCEPT. Full coverage continues When a policy is in force for a longer duration, the better the cash values and the nonforfeiture values. D) Grace period provision. A) Policy What is an insurer required to do when faced with an error made under the Misstatement of Age provision? Which of these is NOT considered to be a common life insurance nonforfeiture option? Which of these life insurance riders allows the applicant to have excess coverage? A) Period of time after the initial premium is paid and before the policy is issued A) Reduction of premium C) Address How much will Ds beneficiarys receive? When the term insurance expires, A) he has the option of resuming the original policy and paying the same premium C) Pay full benefits as stated in the policy \text { Equipment } & 625,000 & \\ C) It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill Unit 6 Flashcards by Lauren Pulido | Brainscape C) Dividends are always taxable Give your reasons. A) Long-term care rider B) the policy would be payable only after the beneficiary makes past due premium payment AzAnswer team is here with the right answer to your question. B) Paid-up additions Policyholders can choose to access the policy's cash value through cash . An insurance contract must contain all of the following to be considered legally binding EXCEPT a) Consideration b) Competent parties c) Beneficiary's consent d) Offer and Acceptance. A policy loan is issued by an insurance company and uses the cash value of a life insurance policy as collateral. All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT. The policy value, therefore, should reflect the effects of inflation upon the economy. Whose life is covered on a life insurance policy that contains a payor benefit clause? With the cash surrender value option, the policy owner terminates the policy and receives the remaining cash value within six months. If an insured dies because of an accident, which type of life insurance rider will provide additional coverage? Ron has a life insurance policy with a face value of $100,000 and a cost of living rider. The insurance company charges a surrender fee to the policy owner to cover expenses incurred in recording the policy in the companys books and any administrative expenses incurred. A) Grace period B) Reduced paid-up insurance Which policy provision protects the policyowner from unintentional lapse of the contract? D) Leave, A life insurance rider that allows an individual to purchase insurance as they grow older, regardless of insurability, is called a(n), A) guaranteed term rider C) the outstanding policy loan balance The cash surrender value will also be reduced by any outstanding loan amount. D) Cash surrender. Which nonforfeiture option has the highest amount of insurance protection? automatically add the amount of interest due to the loan balance. D) hazardous occupations. Chapter 8 Quiz Flashcards | Quizlet D) the claim would be denied, A) the policy would be payable, minus the premium amount, The two major actions required for a policyholder to comply with the Reinstatement Clause are, A) provide evidence of insurability, agree to a new incontestable period Which of these is considered to be a Living Benefit option in a life insurance policy? B) Make a premium payment after the due date without any loss of coverage A) Increases the policys cash value Each takes out a $500,000 life insurance policy on the other, naming himself as primary beneficiary. D) A return of excess premium subject to capital gains tax, C) A return of excess premium and not taxable, All of the following riders can increase the death benefit amount EXCEPT, A) Cost of Living g. Income taxes of$55,539 are owed but unrecorded and unpaid. She died January 10 without making the premium payment. A) Accelerated death benefit rider With maintenance cost as the dependent variable and age, odometer miles, miles since last maintenance, and engine type as the independent variables, create a regression equation using statistical software by setting variable to 1. The reduced life insurance coverage is calculated based on the insureds attained age, cash surrender value, and the number of premiums paid by the policy owner. Feel free to get in touch with us via email. A) Accumulation at Interest Option P died five years after purchasing a life policy. Which of the questions would you be unlikely to ask when interviewing a real estate agent? ? B) Dividend options Only the beneficiary may select, In a Life insurance contract, an insurance companys promise to pay stated benefits is called the. A Medicare Supplement policy must provide coverage for pre-existing conditions after the policy has been in force for a) 1 year b) 2 years c) 90 days d) 6 months. $100,000, L takes out a life insurance policy and dies 10 years later. Which of the following statements is true? d. Accumulated Depreciation-Equipment. Which of these would be considered a Limited-Pay Life policy? C) aviation The above question All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT, Was part of Insurance MCQs & Answers. One life insurance policy provision permits the policyholder to pledge certain rights in the life insurance policy to secure a loan. D) Payor benefit. Opt for reduced coverage with a reduced death benefit for the remaining term of the insurance. Are you having trouble answering the question All of the following are nonforfeiture options, EXCEPT:? the death benefit paid will be what the premium would have purchased at the correct age. D) the insured and beneficiary died at the same time. Buy extended insurance with accumulated cash value with no additional premiums required. A nonforfeiture clause is an insurance policy clause that is included in standard life insurance and long-term care insurance. C) Incontestability B) add-on a) Both irrevocable and Revocable. It stipulates that a policy owner will receive partial or full benefits or a refund of premium paid towards a whole life insurance policy if the policy lapses due to non-payment. Explanation: (Life Insurance Policy Provisions, Options and Riders)There are only three non-forfeiture options: 1) Cash Surrender, 2) Reduced Paid-Up and the automatic option, 3) Extended Term. Past due premiums are waived An insured is past due on his life insurance premium, but is still within the Grace Period. A) Accidental death rider It is not taxable The policy is then issued with no scuba exclusions. P is the insured on a participating life policy. d) Alzheimer's disease While normally mental and nervous disorders or disease are excluded in long-term care policies, Alzheimer's disease is not. Which of the following is the process of getting oxygen from the environment to the tissues of the body? At year end, you have the following data for adjustments: a. Under the Misstatement of Age provision, the insurer will, adjust the death benefit to a reduced amount, The incontestable clause allows an insurer to, contest a claim during the contestable period. C) Incontestable clause Which of these Nonforfeiture Options continue a build-up of cash value? C) Results A) Active Assignment of ownership The policyis calculatedfrom the insureds attained age. In what part of an insurance policy are policy benefits found? Tax deductible. One of the questions on the application asks if P engages in scuba diving, to which P answers "No". 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. \text { Wages Expense } & 137,000 & \\ B) payor rider 350 Flashcards | Chegg.com C) Premium increase Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value. C) automatic premium loan D) Policy loans will no longer be available. I. Before issuing payment to the policy owner, outstanding loan amounts are satisfied with the cash value. Refer to the earlier problem. Change the beneficiary, if revocable, Modify a provision in the insurance contract. D) grace period. B) Waiver of Premium Which of the following statements is (are) true regarding life insurance policyholder dividends? Under an extended term nonforfeiture option, the policy cash value is converted to answer choices A higher face amount than the whole life policy. C) Policys cash value is not affected A) Waiver \hline \text { Cash } & \$ 3,100 & \\ beneficiarys age, M has an insurance policy that also has an outstanding policy loan at the time of Ms death. A) Policy has a decreased face amount D) $4,000 A sub-agent cannot take or sign an application. B) settlement option pilot of personal airplane. b) The key employee has premiums deducted from his salary. c) Beneficiary's consent The four essential elements of all legal contracts are offer and acceptance, consideration, competent parties, and legal purpose. C) nonforfeiture option Sometimes, a policy expires after a so-called grace period.
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