d) Alzheimer's disease While normally mental and nervous disorders or disease are excluded in long-term care policies, Alzheimer's disease is not. B) Period of time it takes for a policys underwriting to compete Bruce is involved in an accident and becomes totally and permanently disabled. 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. J let her life insurance policy lapse 8 months ago due to nonpayment. D) Life income annuity. D) Income, A life insurance policy normally contains a provision that restricts coverage in the event of death under all of the following situations EXCEPT, A) fare-paying passenger 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. You can get your paper edited to read like this. D) buy additional insurance coverage, All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT, A) Extended Term Insurance A) The face amount and policy premium are not affected by the payment a) Extended Term Insurance When a misrepresentation on a life insurance policy application is discovered, what action may an insurance company take? C) nonforfeiture option If D dies without making any further changes, to whom will the policy proceeds be paid to? 609.5315. Which of these arrangements allows one to bypass insurable interest laws? C) are limited by the face amount of the policy Which type of life policy contains a monthly mortality charge as well as self-directed investment choices? Using this, plot the residuals from the final regression equation created in step (b) against the values of Y that were fitted. D) Bill the policyowner for back premiums. P cannot borrow against the policys cash value while disabled For traditional whole-life policies, the policyholder decides how they would like to access the policys cash value. D) Reinstatement, A whole life policy option where extended term insurance is selected is called a(n), A) dividend option A) Reinstatement This rider is called a(n), A) Guaranteed insurability rider How are acts of war and aviation treated under a group life insurance policy? 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. When the insured dies or at the policys maturity date, whichever happens first, The provision that can be used to put an insurance policy back in force after it has lapsed due to nonpayment is called, All of these statements about the Waiver of Premium provision are correct EXCEPT B) One year term S dies 5 years later in 2008 and the insurer pays the beneficiary $10,500. from October 1 to December 31 is unpaid and unrecorded. \text { Supplies } & 4,200 & \\ D) the protection ends. Are you looking for the correct answer to the question All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT? How do life insurance companies handle cases where the insured commits suicide within the contracts stated Contestable period? 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. 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) suicide Never tax deductible. In order to project a classy image, an expensive seafood restaurant requires that its servers wear tuxedos . D) Cash surrender. D) Period of time after the premium is due but the policy remains in force, D) Period of time after the premium is due but the policy remains in force, All of these are common exclusions to a life insurance policy EXCEPT, A) accidental death The cash surrender value will also be reduced by any outstanding loan amount. Her doctor said that her only chance of survival is an experimental treatment. Recent Examples on the Web This relatively unknown nonforfeiture option is called a life settlement. Extended-term insurance allows a policyholderto stop paying the premiums, but not forfeit the equity of theirpolicy. His insurance policy continues in force without payment of further premiums. All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT. B) Make a premium payment after the due date without any loss of coverage Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. It is taxed as capital gains g. Salaries and Wages Expense A) Accidental death rider Which of these describe a participating life insurance policy? 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. Use the accumulated cash value to pay the remaining future premiums. D) Reduced Paid-Up Insurance. C) Reinstatement period Which of the following is the process of getting oxygen from the environment to the tissues of the body? B) $800 B) war In permanent life insurance policies, if you fail to pay the premiums in the grace period, you won't lose your life insurance. B) Pay age-corrected benefits A) Entire contract period Which of these is an element of a Variable Life policy? 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? 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. An error was made on Marys life insurance application. Coverage will be adjusted to reflect the insureds true age if a misstatement of age is discovered. With the extended term option, you can choose to use the cash value in a whole life insurance policy to term insurance, allowing you to stop paying premiums. Plot the fitted values on the horizontal axis and the residuals on the vertical axis. 90 percent of forfeiture proceeds go to law enforcement, Law enforcement required to report forfeitures to the state auditor on a monthly basis, and the auditor must then make annual reports to the state Legislature. Loans obtained by a policyowner against the cash value of a life insurance policy A whole life policy option where extended term insurance is selected is called a. D) revoke an absolute assignment. Give your reasons. D) Payor benefit. 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. d) Extended Term The Extended Term nonforfeiture option has the same face amount as the original policy, but for a shorter period of time. All of the following are nonforfeiture options EXCEPTo paid-up additions extended term insurance. He forgot to pay the premium that was due last week. Which of these require an offer, acceptance, and consideration? Unpaid interest will be added to your loan amount and will be subject to compounding. Instead, you can access your accumulated cash value with the following options: If the policyholder does not make a selection, the terms of the policy will generally stipulate which option would go into effect if the policy lapses or is surrendered. Which of the following provisions guarantees that premiums will be waived if a Juvenile Life policyowner becomes disabled? The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain . What will the beneficiary receive if the insured dies during this Grace Period? Interest for the period D) cost of living rider. Consider consulting a financial advisor who can guide you on choosing an option that will best fit your circumstances. A) Net death benefit will be reduced if the loan is not repaid f. Six months interest at 8% on the note was paid on September 30. Sheila would like to purchase a cash value life insurance policy. The correct answer is "Automatic Premium Loan Option". D) Monthly income payments. The policy value, therefore, should reflect the effects of inflation upon the economy. These include white papers, government data, original reporting, and interviews with industry experts. Beneficiary will be paid the Death Benefit. Fixed Amount ", NAIC.org. B) Probation period Individual insurance 2. B) automatic premium loan 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 I. A) Cash surrender Which of these is NOT a characteristic of the Accelerated Death Benefit option? Full face amount minus any past due premiums. D) irrevocable assignment. Before issuing payment to the policy owner, outstanding loan amounts are satisfied with the cash value. AILife.com. Correct answer: (D) Kurt is an active duty serviceman who was recently killed in an accident while home on leave. D) any surrender charges owed by the policyowner, B) past due premiums that have not been paid by the end of the grace period. A) Transfer ownership of the policy C) Incontestability The full face amount is available as an accelerated benefit How to use nonforfeiture in a sentence. Interest Only D) the insured and beneficiary died at the same time. How many of each item is in stock? D) A dividend option is selected by the insured at the time of policy purchase, D) A dividend option is selected by the insured at the time of policy purchase. Which policy provision protects the policyowner from unintentional lapse of the contract? D) Waiver of premium, An endorsement found in an insurance plan which modifies the provisions of the policy is called a(n), A) attachment She died January 10 without making the premium payment. 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. D) is injured in a skiing accident and dies 18 months later. 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. D) Decreasing term insurance, A provision that allows a policyowner to withdraw a policys cash value interest free is a(n), A) partial surrender Tax deductible. Which life insurance policy provision will permit Elaine to use the life insurance proceeds before she dies to pay for her medical care? B) settlement option Five years later, T commits suicide. C) Extended term insurance Instead, there are four options that the owner can choose from in order to access the accumulated cash value. (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). Which statement is true regarding policy dividends? What is the purpose for having an accelerated death benefit on a life insurance policy? \end{array} Let us have a look at your work and suggest how to improve it! 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? Meanwhile, theequity you built is used to purchase a term policy that equals the number of years you paid premiums. A) The policy may be paid up early by using accumulated cash values 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 Life insurance policyholders can select one of four nonforfeiture benefit options: the cash surrender value, extended term insurance, loan value, and paid-up insurance. B) pilot of personal airplane C) suicide Each brother purchases a life policy that has a $750 annual premium. type of life insurance A long-term care rider in a life insurance policy pays a daily benefit in the event of which of the following? Sometimes, a policy expires after a so-called grace period. Cash surrender value applies to the savings element of whole life insurance policies payable before death. Which of the following statements is true? For an individual who is NOT covered by an employer-sponsored plan, IRA contributions are 1. Evidence of insurability is not required when the option is exercised B) absolute assignment Which of these is NOT a type of agent authority? The automatic premium loan provision is designed to, All of these statements concerning Settlement Options are true EXCEPT Who does the sub-agent represent? a. His $100,000 Whole life policy contains a War Exclusion clause. Under an extended term nonforfeiture option, the policy cash value is converted to answer choices A higher face amount than the whole life policy. B) provide evidence of insurability to the insurer safeguard the insurer from an applicant who is contemplating suicide, A provision in a life insurance policy that pays the policyowner an amount that does not surpass the guaranteed cash value is called the. D) Settlement options. B) aviation With extended-term insurance, the face amount of the policy stays the same, but it is flipped to an extended-term insurance policy. \text { Unearned Service Revenue } & & 11,200 \\ Which of the following areas do errors commonly occur on applications and for which the incontestable clause does NOT apply? What are collateral assignments normally associated with? Standard life insurance and long-term care insurance policies may have a nonforfeiture clause. A) It allows for a spouse to be added as a rider to a life insurance policy Ike purchases a whole life policy. C) waiting period B) Face amount of the new policy equals that of the original policy The series is called All or Nothing. Work with our consultant to learn what to alter. 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. All of the following statements are true EXCEPT, A) Mikes policy will develop no cash value over the policys term a) Both irrevocable and Revocable. In 2010, P takes up scuba diving and dies in a scuba-related accident in 2011. She would like to borrow $15,000 against the cash value. b) Within 3 years. e. Equipment. Set the qualitative variable to 0 if the engine type is a diesel. Investopedia requires writers to use primary sources to support their work. A) No death benefit is owed because of the misstatement of age Ss attained age \text { Retained Earnings, 12/31/2018 } & & 37,000 \\ 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. Must have a terminal illness to qualify. In a life insurance policy, which feature states that the policy will not cover certain risks? Which of these require an offer, acceptance, and consideration? Refer to the earlier problem. Proceeds can be administered by the insurance company 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. D) war. c) The agent An agent represents the company. D) hazardous occupations. fare-paying passenger. Learn how policy loans work and about their risks. reduction of premium Which situation accurately describes a reduced paid-up nonforfeiture option? 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. Choosing the nonforfeiture extended term option allows the policy owner to use the cash value to purchase a term insurance policy with a death benefit equal to that of the original whole-life policy. . Variable Whole Life Insurance can be described as. a) Modified life b) Variable life c) Ordinary life d) Graded premium whole life. Amount of premium payments and when they are due. S has a Whole Life policy with a premium payment due soon. D) Conditions. A) The policys cost basis is taxable A) Reduce premium reduced paid-up insurance cash value. Which of the following statements is TRUE? 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. Which of the following statements is (are) true regarding life insurance policyholder dividends? C) Accidental Death Rider The option that provides an additional death benefit for a limited amount of time at the lowest possible cost is called a(n), Accidental Death and Dismemberment rider (AD&D). Which situation accurately describes a reduced paid-up nonforfeiture option? D) accidental death. o paid - up additions extended term insurance . B) Exclusion A) Active When the term insurance expires, A) he has the option of resuming the original policy and paying the same premium Which provision prevents an insurer from changing the terms of the contract with the policyowner by referring to documents not found within the policy itself? S dies 1 year later of natural causes. P died five years after purchasing a life policy. B) Purchase additional coverage with no evidence of insurability required Cookies collect information about your preferences and your devices and are used to make the site work as you expect it to, to understand how you interact with the site, and to show advertisements that are targeted to your interests. B) The full original death benefit listed on the policy 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. B) Extended term insurance Life Income. d) The PPO will pay reduced benefits. What provision can Sheila add to her policy to address this concern? D) Accumulation at interest. A) Accelerated death benefit rider C) Provides for the early payment of some portion of the policy face amount should be insured suffer from a terminal illness Which of the following statements about accumulated interest earned on dividends from an insurance policy is TRUE? If thats the case, you dont have to worry anymore. Waiver of Premium Ron's health insurance will not pay the full amount charged by the non-PPO doctor. D) The policys cost basic is exempt from taxation, D) The policys cost basic is exempt from taxation. What does the grace period allow a life insurance policyowner to do? Annuities pay regular payments as outlined in the contract. All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT Options a) Extended Term Insurance b) Cash Surrender c) Reducation of Premium d) Reduced Paid-Up Insurance Answer: c) Reduction of Premium When does a Guaranteed Insurability Rider allow the insured to buy additional coverage? D) Insured has become terminally ill. The owner gets the cash surrender value in cash, either partially or in full. If Ron goes to a doctor who is not a PPO provider, what will happen? 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 Ron has a life insurance policy with a face value of $100,000 and a cost of living rider. Past-due interest on a policy loan is added to the total debt C) automatic premium loan rider D) Mike has the option of using his cash value to purchase a reduced amount of paid-up whole life insurance, D) Mike has the option of using his cash value to purchase a reduced amount of paid-up whole life insurance. A) Proof of insurability N dies September 15. 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. The meaning of NONFORFEITURE is failure or refusal to forfeit something often used before another noun. C) Paid-up additions A nonforfeiture clause is an insurance policy clause that is included in standard life insurance and long-term care insurance. reduced paid-up insurance. 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.. B) the beneficiary outlived the insured Insurers require policyholders to have paid at least three years of premiums before they can be eligible for paid-up insurance. D) The policys cash values steadily decrease after 20 years, B) The policy may be paid up early by using policy dividends, A guaranteed issue insurance policy has no, A) initial premium requirement The restaurant hires only male wait staff. Have a great time ahead. Reduced Paid-up D) would be subject to a Federal estate tax, B) would not be treated as taxable income, The free-look provision gives the policyowner, A) the right to return the policy for a partial refund within a specified number of days Life insurance is a contract in which an insurer, in exchange for a premium, guarantees payment to an insureds beneficiaries when the insured dies. While investigating the claim, the insurer discovered material misrepresentations made by P during the application process. c) Beneficiary's consent The four essential elements of all legal contracts are offer and acceptance, consideration, competent parties, and legal purpose. Partially tax deductible depending on the income level. 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. The term policy ends after a fixed number of years as detailed in the policys nonforfeiture table. A criminal conviction is required for civil forfeiture. until after the adjusting entries are made? Paid-up Additions Which of the following is CORRECT regarding the death benefit amount? Each takes out a $500,000 life insurance policy on the other, naming himself as primary beneficiary. e. Wages in the amount of $3,450 are owed but unpaid and unrecorded at year end. C) all remaining cash values are paid to the policyowner A) extended term B) Free-look period In what part of an insurance policy are policy benefits found? However, the death benefit that surviving dependents of the policy owner would receive is lower than the amount of cash value in the original life insurance policy. b The cash value in a policy belongs C) disability In personum actions are against the owner of property, whereas in rem actions are taken . Which military service exclusion clause would pay upon his death?
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