\text { Wages Expense } & 137,000 & \\ pilot of personal airplane. \text { Account } & \textbf { Debit } & \textbf { Credit } \\ Life insurance policyholders can select one of four nonforfeiture benefit options: the cash surrender value, extended term insurance, loan value, and paid-up insurance. S dies 1 year later of natural causes. B) select a beneficiary A) Period of time after the initial premium is paid and before the policy is issued B) The insurers obligation to return all premiums upon an approved death claim How are acts of war and aviation treated under a group life insurance policy? ? B) Reduced paid-up insurance B) Policy loans All of the following are optional methods of settlement after the insured has died EXCEPT life income option. AILife.com. c) The business is the owner and beneficiary of the policy. All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT. Instead, there are four options that the owner can choose from in order to access the accumulated cash value. S buys a $10,000 Whole Life policy in 2003 and pays an annual premium of $100. Set the qualitative variable to 0 if the engine type is a diesel. In permanent life insurance, the policyholder will not lose the life insurance policy entirely. D) a source of funding a term rider to the policy, A) the policy loan value which the insured may borrow against. What is the name of the provision which states that a copy of the application must be attached to the policy when issued? A) Insured becomes unemployed Marguerita is a Certified Financial Planner (CFP), Chartered Retirement Planning Counselor (CRPC), Retirement Income Certified Professional (RICP), and a Chartered Socially Responsible Investing Counselor (CSRIC). cash (lump sum). The correct answer is "Automatic Premium Loan Option". Just like with a conventional loan, youll be charged interest that could range from 5% to 9% on the loan. Partially tax deductible depending on the income level. "Standard nonforfeiture law for life insurance.". What is an insurer required to do when faced with an error made under the Misstatement of Age provision? Which situation accurately describes a reduced paid-up nonforfeiture option? C) accelerated benefit rider Some states require a provision limiting the time parameters in which a claimant may seek recovery from an insurer under a policy. 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. 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 reduced paid-up insurance. Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options? Permanent life insurance, long-term disability, and long-term care insurance policies may have nonforfeiture clauses. P is the insured on a participating life policy. While investigating the claim, the insurer discovered material misrepresentations made by P during the application process. A nonforfeiture clause is an insurance policy clause stipulating that an insured party can receive full or partial benefits or a partial refund of premiums after a lapse due to nonpayment.. A) Transfer ownership of the policy In permanent life insurance policies, if you fail to pay the premiums in the grace period, you won't lose your life insurance. D) Provision. B) absolute assignment For example, if you purchase a policy when you were 20 and you paid until age 55, you would receive a term policy that is less than 35 years. D is the policyowner and insured for a $50,000 life insurance policy. Which of the following statements is CORRECT about accelerated death benefits? 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 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. until after the adjusting entries are made? When an accidental death benefit is added to a whole life policy, how does this affect the policys cash value? After a policy has lapsed, which provision allows the insured to continue coverage? Which of these is NOT a characteristic of the Accelerated Death Benefit option? A) Dividends are always guaranteed What is an insurer required to do when faced with an error made under the Misstatement of Age provision? It is tax deductible b) Variable life Because variable life policies invest in the insurer's separate accounts and allow the policyowner to choose specific investment strategies, the interest rates will fluctuate depending upon the performance of the investments. A sub-agent cannot take or sign an application. Interest only is a settlement option. See the bus stats for the Lincolnville School District. CFI is the official provider of the global Commercial Banking & Credit Analyst (CBCA) certification program, designed to help anyone become a world-class financial analyst. A) A return of excess premium and partially taxable D) Conditions. $100,000, L takes out a life insurance policy and dies 10 years later. Void the policy only if it is discovered during the Contestable period and proven to be material, All of these Settlement options involve the systematic liquidation of the death proceeds in the event of the insureds death EXCEPT Which of these is NOT considered to be a common life insurance nonforfeiture option? 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 How much will the insurer pay? Full face amount minus any past due premiums. D) the protection ends. Kurt is an active duty serviceman who was recently killed in an accident while home on leave. C) accident If the teacher wants an increasing Death Benefit to protect against inflation, the teacher should select which of the following Dividend Options? How much do I qualify to borrow? If he dies, how will the adjusted death benefit be calculated? Mike buys a 10-year renewable term policy. The goal of a life insurance policy is to protect the surviving dependents of the policyholder such that, after the death of the insured person, the insurance company pays a specific sum to the named beneficiaries. B) Juvenile waiver Which of the following protects a policyowner from a misrepresentation caused by an innocent mistake? Paid-up Additions D) Premium decrease. The treatment is expensive and is not covered by Elaine's health insurance. ", "Standard nonforfeiture law for life insurance.". A) $400 Which life insurance policy provision will permit Elaine to use the life insurance proceeds before she dies to pay for her medical care? a) Treatment payable by Medicare. C) Accidental Death Rider A provision that allows a policyowner to temporarily give up ownership rights to secure a loan is called a Pat owns a 20-pay life policy with a paid-up dividend option. Use the accumulated cash value to pay the remaining future premiums. Which of these features would limit the insurers obligation in the event N was killed while flying as a student pilot? Diffusion Let us complete them for you. Thanks for choosing us. What are collateral assignments normally associated with? One life insurance policy provision permits the policyholder to pledge certain rights in the life insurance policy to secure a loan. B) Status C) the right to change a policy provision The rest are all possible exclusions. Indicate whether each of the following items is a real or nominal account and whether it appears in the balance sheet or the income statement. \text { Retained Earnings, 12/31/2018 } & & 37,000 \\ The above question All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT, Was part of Insurance MCQs & Answers. a The premiums on their policy will never increase. B) aviation C) The death benefit paid will be what the premium would be purchased at the correct age This value is payable before death. a) Conversion b) Decreasing Term c) Reduced Paid-up d) Extended Term. What is the purpose for having an accelerated death benefit on a life insurance policy? The option allows the policyholder to retain the death benefit without being required to make additional future premium payments. Which of the following statements is (are) true regarding life insurance policyholder dividends? C) Extended term option \text { Rent Expense } & 229,000 & \\ C) Waivers Irrevocable beneficiaries must give permission to the policyowner in order for the beneficiary to be changed. B) Insuring provision \text { Equipment } & 625,000 & \\ C) Endowment rider This provision is the, All of the following are nonforfeiture options EXCEPT. At year end, you have the following data for adjustments: a. C) Paid-Up Additions Option A) Payment mode C) Entire Contract It stipulates that the policyholder will receive a partial or full refund of premiums paid if the policy lapses after a defined period due to missed premium payments. D) Payor benefit. D) the right to return the policy for a full refund within a specified number of days, D) the right to return the policy for a full refund within a specified number of days, The double indemnity provision in a life insurance policy pertains to an insureds death caused by a(n), A) sickness Quickly and professionally. All of the following are optional methods of settlement after the insured has died EXCEPT. Proceeds can be administered by the insurance company C) Period of time after a policy is issued and before it is delivered to policyowner C) dies instantly from a car accident S would like to use dividends from her life insurance policy to purchase paid-up additions. C) Annuity rider D) The agents obligation to pay a death benefit upon an approved death claim, C) The insurers obligation to pay a death benefit upon an approved death claim. B) Waiver of premium rider B) Entire contract C) Nonforfeiture provision Grace period terms are stated in the policy. B) Purchase additional coverage with no evidence of insurability required Minn. Stat. Which of these actions will the insurer take? Annuities pay regular payments as outlined in the contract. 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. What is the Suicide provision designed to do? Refer to the earlier problem. C) Policys cash value is not affected In a life insurance policy, which feature states that the policy will not cover certain risks? D) Monthly income payments. What provision in a life insurance policy states that the application is considered part of the contract? Depending on the age of the policy, the cash surrender value could be less than theactual cash value. 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 same face amount as in the whole life policy. C) Covered hazard \text { Service Revenue } & & 598,000 \\ Which of these require an offer, acceptance, and consideration? Which of the following is a restatement condition? Who does the sub-agent represent? Which provision will pay a portion of the death benefit prior to the insureds death due to a serious illness? D) policy and attached application, Ownership of a life insurance policy may be temporarily transferred with a(n), A) collateral assignment the death benefit paid will be what the premium would have purchased at the correct age. An insurer can be protected from adverse selection with which policy provision? c. Inventory. In what part of an insurance policy are policy benefits found? All of the following are Nonforfeiture options EXCEPT a Reduced paid-up b Interest only c Cash surrender d Extended term 6: Which of the following is guaranteed to the policyowner through nonforfeiture values? Before issuing payment to the policy owner, outstanding loan amounts are satisfied with the cash value. An analysis indicates that prepaid rent on December 31 should be $2,300. The death benefit would be equal to the benefit in the original whole life insurance policy. All of the following are true regarding a decreasing term policy EXCEPT The insured's premiums will be waived until she is 21. D) Cash dividend option. You dont have to worry about it anymore. D) Family income rider. Your email address will not be published. D) Make a policy loan interest payment after the due date without any loss of coverage, B) Make a premium payment after the due date without any loss of coverage. Work with our consultant to learn what to alter. A) Active An insured is past due on his life insurance premium, but is still within the Grace Period. D) Beneficiary. Such an option considers the saving component of the policy. B) Pay age-corrected benefits Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value. A) The agents obligation to provide the proper amount of coverage Suppose the first residual is 12.0(instead of 2.0 ) and the last residual is -11.0(instead of -1.0). All of the following are nonforfeiture options EXCEPTo paid-up additions extended term insurance. In some instances, insurers provide an extended-term option as an automatic option in the event that the original coverage lapses due to missed premium payments. 2. Cash surrender value applies to the savings element of whole life insurance policies payable before death. C) Reinstatement period Also, any outstanding amounts on the insured partys coverage are deducted from the cash value. D) hazardous jobs, A provision in a whole life policy that allows a policyowner to terminate the policy in return for a reduced paid-up policy of the same type is called a(n), A) insuring clause A) Accidental death rider Fixed Period Nonforfeiture clauses offer protection in the event a policyholder stops paying their premium. B) Age C) Ike will have a level premium A) Contest the terms of the policy after the issue date Five years later, T commits suicide. B owns a Whole Life policy with a guaranteed insurability option that allows him to purchase, without evidence of insurability, stated amounts of, additional Whole Life coverage at specified times. A) Reinstatement D) A loan can be taken out for up to the face amount of the policy, A) Net death benefit will be reduced if the loan is not repaid, Life insurance policies will normally pay for losses arising from, A) commercial aviation D) accidental death. Opt for reduced coverage with a reduced death benefit for the remaining term of the insurance. C) rider Eric purchased a cash value life insurance policy six years ago. 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 d) Revocable Revocable beneficiares can be changed at any point. Learn how policy loans work and about their risks. Learn how it works. B) Make a premium payment after the due date without any loss of coverage Explain your reasons. \textbf{December 31, 2019} A counselor receives a fee for advice, and can maintain a dual license as an agent and counselor. D) is injured in a skiing accident and dies 18 months later. We also reference original research from other reputable publishers where appropriate. Question 8 30 seconds Q. A nonforfeiture clause is an insurance policy clause stipulating that an insured party can receive full or partial benefits or a partial refund of premiums after a lapse due to non-payment. P purchases a $50,000 whole life insurance policy in 2005. With extended-term insurance, the face amount of the policy stays the same, but it is flipped to an extended-term insurance policy. N is a student pilot with a large life insurance policy. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. If D dies without making any further changes, to whom will the policy proceeds be paid to? from October 1 to December 31 is unpaid and unrecorded. During the claim process, the insurer discovers that L had understated her age on the application. a. C) no beneficiary was ever named When does a Guaranteed Insurability Rider allow the insured to buy additional coverage? D) $4,000, A rider that assures premiums will be paid on a juvenile policy until the child reaches a specific age is called a(n), A) waiver of premium rider D) beneficiary assignment, Mike and Ike are 30 year old identical twins. 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. (i.e., paid-up policy), Buy an extended-term insurance policy with the remaining cash surrender value (no further premiums required), Use your accumulated cash value to pay the future premiums (also referred to as an automatic premium loan). D) Cash surrender.
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