"Standard nonforfeiture law for life insurance.". C. becomes chronically ill If a policy owner chooses the cash surrender value option, the insurer will pay the remaining cash value within six months. A. D) Provision. nonforfeiture options. C) Reduced paid-up insurance After surrendering a whole-life insurance policy, the death benefit on that policy no longer exists. A. 1035 exchange ", "Standard nonforfeiture law for life insurance.". C) pay past due premiums, agree to new incontestable period A) Reinstatement clause A) Accidental death rider Yes, policyholders can also choose to convert the policy to an annuity. B) payor rider D. The 7-pay test is used to determine the maximum death benefit of the policy, B. B) Extended term insurance A. D. Decreasing term policy, What type of policy would offer a 40-year old the quickest accumulation of cash value? D. does not guarantee an assignment provision, C. does not guarantee a return on its investment accounts, What type of life insurance incorporates flexible premiums and an adjustable death benefit? A. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. D. Incontestable period, A life policy with a death benefit that can fluctuate according to the performance of its underlying investment portfolio is referred to as C. Assign policy ownership to the bank D. Double the face amount should the insured be confined to a nursing home, C. Inability of the insured to perform more than 2 Activities of Daily Living (ADLs), The Consideration clause in a life insurance policy indicates that a policyowners consideration consists of a completed application and D. When the policy is surrendered, B. This value is the savings the whole life policy accumulated while it was in place. Answer: C. Reduced Paid-Up You should now have gotten the answer to your question "Which of these Nonforfeiture Options continue a build-up of cash value?", which was part of Insurance MCQs & Answers. N is covered by a Term Life policy and does not make the required premium payment which was due August 1. A) dividend option B) settlement option C) nonforfeiture option D) interest-only optionC) nonforfeiture option. Life Income. A) Bank loans B) Payor rider 10-year Renewable and Convertible Term D. Expulsion, A long-term care rider in a life insurance policy may trigger a benefit in the event of which of the following? Depending on the age of the policy, the cash surrender value could be less than theactual cash value. C. Inability of the insured to perform more than 2 Activities of Daily Living (ADLs) C) the right to change a policy provision A. Whole Life Insurance: Whats the Difference? C. Ownership cannot be assigned after the incontestable period B. Read our term vs. whole life insurance guide to learn more and compare rates closely. ; In a non-forfeiture option, even if the person misses out on some premium and doesn't pay in time, they'll still get the value of the policy. C. Family Income rider B. 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.. For example, a $1 million death benefit may only receive $50,000 cash at time of surrender. B) waiver of premium C. Family Income policy B. A. the face amount is automatically adjusted at the time of renewal A. A. Paid-up Additions James is the insured on a life insurance policy where his age was misstated on the application. 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 brief description of these benefits follow: Reduced Paid-Up Benefit: If you purchase a reduced paid-up benefit, it will provide that if you lapse your policy after a specified number of years, the policy will continue with reduced daily benefit amounts (some insurers apply this nonforfeiture benefit only to nursing home benefits). D. disallow any further loans, B. automatically add the amount of interest due to the loan balance, What is the Suicide provision designed to do? D. Allows the policyowner to adjust the death benefit and premium amount at anytime, A. Which statement is true if Ps premiums are waived due to a disability? Privacy Policy and Community Guidelines. Summary of benefits C) nonforfeiture option. When assessing a client with partial-thickness burns over 60% of the body, which finding should the nurse report immediately? Kurt is an active duty serviceman who was recently killed in an accident while home on leave. A. There are three main types of nonforfeiture options: cash surrender, paid-up insurance, and extended term D. Adjustable Life, A Family Income Policy is a combination of Whole Life and Cash Surrender Value. Which of the following is the process of getting oxygen from the environment to the tissues of the body? However, the surrender value is often significantly less than your death benefit. Related. The beneficiary is Ds wife. Our insurance industry partnerships dont influence our content. C) policy and any verbal agreements With extended-term insurance, the face amount of the policy stays the same, but it is flipped to an extended-term insurance policy. We are not affiliated with any one insurance provider and cannot guarantee quotes from any single provider. This paid-up feature means you maintain life insurance coverage, and your survivors will still receive a death benefit after you pass. Automatic Policy Automatic Policy Loan Conversion A) Accelerated death benefit rider A. C) Policys cash value is not affected C) automatic premium loan rider C. An insurers required reserve amount Life Paid-Up at Age 70 She has since used that knowledge in her more than ten years as a writer, largely in the insurance niche. B. does not allow the policyowner to assume the investment risk For example, if you bought whole life insurance when you were 20 and forfeited the policy at 60, you would receive a 40-year extended term life insurance policy. D) Life income annuity. C) It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill C) Incontestability Nonforfeiture options in life insurance refer to the different ways policyholders can maintain coverage after lapsing on premium payments. C) Allows for a full refund after policy delivery She would like to borrow $15,000 against the cash value. What is an insurance policys grace period? A) Contest the terms of the policy after the issue date C. Insured must be eligible for Social Security disability for claim to be accepted Are there other nonforfeiture options available? A) Increases the policys cash value A) Reduce premium D. Cash Surrender, Which of these life insurance riders allows the applicant to have excess coverage? D. Split equally between the ex-wife and current wife, What action can a policyowner take if an application for a bank loan requires collateral? B) Buyers Guide What kind of life insurance policy has nonforfeiture options? The insurance company guarantees a minimum cash value for the insurancepolicy after a specific period, typically three years from when the policy starts. C. allow a policyowner to request a policy loan Extended-term insurance allows a policyholderto stop paying the premiums, but not forfeit the equity of theirpolicy. C) Insured has had policy in force for a specified number of years Which of the following is CORRECT regarding the death benefit amount? 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. Legally, nonforfeiture options protect policyholders from losing life insurance coverage for missed payments. It is not taxable Which situation accurately describes a reduced paid-up nonforfeiture option? Sometimes, a policy expires after a so-called grace period. C. Child A) Transfer ownership of the policy B. C. Accelerated death benefit B) the coverage can be extended with a lump sum payment Parent Variable Life Which of these is NOT considered to be a common life insurance nonforfeiture option? B. Endowment However, during the early years of awhole life insurance policy, the savings portion brings little return compared to thepremiumspaid. In that case, the best nonforfeiture option would be the cash surrender value. Allows payor to assign ownership in the event payor becomes disabled When does a life insurance policys waiver of premium take effect? C) nonforfeiture option D. Interest-Sensitive Whole Life, Under a Renewable Term policy, Social Science Business Insurance Chapter 3-4 which of these statements about a Guaranteed Insurability Option rider is NOT TRUE Click the card to flip evidence of insurability is required when the option is exercised Click the card to flip 1 / 19 Flashcards Learn Test Match Created by Stopaskingthisisdumb D) Certificate of Authority, All of these are valid policy dividend options for a life insurance policyowner EXCEPT, A) cash outlay to the policyowner B) The policy may be paid up early by using policy dividends B) Payor rider 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 How is a life insurance policy dividend legally defined? B) A return of excess of premium and fully taxable Which statement is true if P's premiums are waived due to a disability? Claims are denied under the Suicide clause of the policy Comparison shopping should be easy. 10 year increments B. accelerated benefit rider Level Term insurance D. Accidental. D) Extended term rider, In a life insurance policy, the entire contract consists of, A) policy and conditional receipt Not every life insurance company will offer an annuity-based or premium loan nonforfeiture option. C) Suicide clause A. D. nonforfeiture value, 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. Return of premium policy, A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster rate in the early years of the policy. For some companies, this option may be automatic when surrendering a whole life insurance policy. B. B) Cash Surrender D) Cash surrender. A) Insuring clause Automatic Policy Automatic Policy Loan, What does the insuring agreement in a Life insurance contract establish? A nonforfeiture option is a clause in your policy that allows you to receive full or partial benefits from your life insurance if the policy lapses or you want to cancel the plan. Return of premiums paid C) Nonforfeiture provision Cash value life insurance is permanent life insurance with a cash value savings component. Borrow against policy cash value and use as a down payment C) Riders B. Deducted when the policy is discontinued Which of these is NOT a characteristic of the Accelerated Death Benefit option? D. Decreasing Term. Pat owns a 20-pay life policy with a paid-up dividend option. D. disclosure of any medical conditions, A life insurance policy which ensures that the premium will be paid if the insured becomes disabled has what kind of rider attached? C. Their natural child dies at age 18. B. P will have to pay income taxes on the amount of premiums waived Will your insurance policy cover your insurance claim? B. Waiver of Premium rider C. The investment vehicle for this type of policy is held in the insurers general portfolio The remaining cash value may be used to purchase an annuity free of commissions or expenses. A. Paid-up at 65 C. $50,000 C) waiver of premium Cite. Let us have a look at your work and suggest how to improve it! B) military service 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. C. Cash value accumulation of both 20-Pay Life and Straight Life depend on the insurers financial rating Coverage and death benefits will remain intact as long as the cash value is equal to or exceeds the overdue amount. If you miss your life insurance payments, you will surrender your policy back to the company. D) Reduced Paid-Up Insurance. Reduce your coverage for the remaining term of the policy and pay no futurepremiums. A nonforfeiture option in a permanent life insurance policy has the purpose of protecting the consumer in case something were to happen, such as surrendering the policy or being unable to pay premiums. C) The insurers obligation to pay a death benefit upon an approved death claim Ron has a life insurance policy with a face value of $100,000 and a cost of living rider. Assignment Just like with a conventional loan, youll be charged interest that could range from 5% to 9% on the loan. Extended term option B) incontestable period A. D) Bill the policyowner for back premiums.
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