C) Return of premium provision Fixed Period Eric's coverage is still in force because of which life insurance policy provision? d) Extended Term The Extended Term nonforfeiture option has the same face amount as the original policy, but for a shorter period of time. 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Which of the following is the process of getting oxygen from the environment to the tissues of the body? However, surrendering a portion of the cash value reduces thedeath benefit. Surrender Value: What's the Difference? If a policy owner has continually made premium payments for a sufficient amount of time, a forfeiture clause might become active in one of two ways. 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 Depending on the age of the policy, the cash surrender value could be less than theactual cash value. from October 1 to December 31 is unpaid and unrecorded. C) Period of time after a policy is issued and before it is delivered to policyowner Unlike conventional loans, policy loans don't necessarily need to be paid back. P purchases a $50,000 whole life insurance policy in 2005. Please check below to know the answer. B) The policy will be voided with no death benefits paid Insurance companies can send delinquent interest accounts to a collection agency Which of these require an offer, acceptance, and consideration? ? B) Entire Contract clause Interest for the period Pay face amount minus the past due premium. Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value. Who does the sub-agent represent? d. What price range is your specialty? D) Beneficiary. In the early years of a policy, life insurance companies can deduct fees upon cash surrender. C) A prorated death benefit based on the amount of insurance the insureds premiums would have been if purchased at the correct age A) The original face amount will be paid to the beneficiary g. Income taxes of$55,539 are owed but unrecorded and unpaid. This provision is called a(n). 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 is CORRECT regarding the death benefit amount? D) Nonforfeiture options. C) disability D) supplement. What is the name of the provision which states that a copy of the application must be attached to the policy when issued? computer. A) Active Cash surrender value applies to the savings element of whole life insurance policies payable before death. 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 If cash has accumulated in the policy, state law forbids companies from keeping it and cancelling the policy. Required fields are marked *. 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. B) aviation How much do I qualify to borrow? Paid-up additional insurance is whole life insurance that a policyholder purchases using the policys dividends. D) $4,000 When you visit the site, Dotdash Meredith and its partners may store or retrieve information on your browser, mostly in the form of cookies. What Is Charitable Gift of Life Insurance? C) Incontestable clause $100,000, L takes out a life insurance policy and dies 10 years later. All of the following are nonforfeiture options, EXCEPT: a. The face amount equal to the cash value. In permanent life insurance, the policyholder will not lose the life insurance policy entirely. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem. Taxable *Dividends are a return of unused premiums on which the insured has already paid taxes. \text { Other Assets } & 60,900 & \\ What action can a policyowner take if an application for a bank loan requires collateral? C) transferable assignment Evidence of insurability is required when the option is exercised the benefit can be offered as a rider at a specific extra cost or may be at no cost. B) Period of time it takes for a policys underwriting to compete 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 He forgot to pay the premium that was due last week. The action must be brought a) Within 2 years. Which of these Nonforfeiture Options continue a build-up of cash value? Reduced Premium. B) select a beneficiary B) Purchase additional coverage with no evidence of insurability required Your email address will not be published. Life insurance policyholders can select one of four nonforfeiture benefit options: the cash surrender value, extended term insurance, loan value, and paid-up insurance. 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 Which statement is correct regarding the premium payment schedule for whole life policies? How is a life insurance policy dividend legally defined? Which provision would keep the policy in force if S does not make the required payment and the policy has adequate cash value from which the premium payment can be made? We also reference original research from other reputable publishers where appropriate. I hope you got the correct answer to your question. Cash surrender value is the accumulated portion of a permanent life insurance policy's cash value that is available to the policyholder upon surrender of the policy. What provision in a life insurance policy states that the application is considered part of the contract? C) are limited by the face amount of the policy The owner gets the cash surrender value in cash, either partially or in full. However, any money you take out will be deducted from the death benefit that goes to your beneficiaries. Correct answer: (D) Which of these provisions require proof of insurability after a policy has lapsed? It is not taxable B) Policy exclusion a) Conversion b) Decreasing Term c) Reduced Paid-up d) Extended Term. 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. You dont have to worry about it anymore. Life insurance is a contract in which an insurer, in exchange for a premium, guarantees payment to an insureds beneficiaries when the insured dies. 4. Extended Term How much will the insurer pay the beneficiary? All of the following are true regarding a decreasing term policy EXCEPT The insured's premiums will be waived until she is 21. b. B) Changes in the insuring clause Financial Modeling & Valuation Analyst (FMVA), Commercial Banking & Credit Analyst (CBCA), Capital Markets & Securities Analyst (CMSA), Certified Business Intelligence & Data Analyst (BIDA), Financial Planning & Wealth Management (FPWM). Also, any outstanding amounts on the insured partys coverage are deducted from the cash value. o paid - up additions extended term insurance . Claims are denied under the Suicide clause of the policy, Which of these statements about a Guaranteed Insurability Option rider is NOT TRUE? N is covered by a Term Life policy and does not make the required premium payment which was due August 1. If Ron goes to a doctor who is not a PPO provider, what will happen? In what part of an insurance policy are policy benefits found? Quickly and professionally. C) Ike will have a level premium For traditional whole-life policies, the owner decides which of four ways (see below) they would like to access the policys cash value. Which statement is true regarding policy dividends? 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 . A) $400 A) Entire contract provision Of the following dividend options, which of these is taxable? Recent Examples on the Web This relatively unknown nonforfeiture option is called a life settlement. D) revoke an absolute assignment. f. Service Revenue. What action will the insurer take? A) Period of time after the initial premium is paid and before the policy is issued B) Make a premium payment after the due date without any loss of coverage An insurer will accept a premium from the insured and continue the coverage in full force as though it was NOT late during which time period? D) is injured in a skiing accident and dies 18 months later. A) Dividends are always guaranteed After reading about the changes in the government's role in the economy, write a one-page essay arguing whether you think those changes are helpful or harmful to the U.S. economy. If he dies, how will the adjusted death benefit be calculated? C) Provides for the early payment of some portion of the policy face amount should be insured suffer from a terminal illness List of Excel Shortcuts When assessing a client with partial-thickness burns over 60% of the body, which finding should the nurse report immediately? Waiver of Premium is available on both permanent and term insurance policies C) The policys premiums will increase after 20 years b) Interest only Nonforfeiture values include cash surrender, extended term and reduced paid-up. A) Incontestable period D) Mandatory provision, In order to activate the reinstatement clause of a lapsed life insurance policy, the insured MUST, A) remit all past-due premiums within the grace period Sheila would like to purchase a cash value life insurance policy. A) Cash surrender A person may have a vested interest in property to be forfeit in two ways: In personum jurisdiction and in rem jurisdiction. Unpaid interest will be added to your loan amount and will be subject to compounding. \text { Retained Earnings, 12/31/2018 } & & 37,000 \\ D) Extended term rider, In a life insurance policy, the entire contract consists of, A) policy and conditional receipt C) Accidental Death Rider Cash Surrender S dies 5 years later in 2008 and the insurer pays the beneficiary $10,500. 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 Ron has a life insurance policy with a face value of $100,000 and a cost of living rider. Have a great time ahead. A double indemnity benefit will be payable to Matts beneficiary if Matt, A) is killed while committing a felony Change the beneficiary, if revocable, Modify a provision in the insurance contract. 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. The amount of cash value you will have built-in your policy will be reduced by the amount of any loans against your life insurance. C) all past premiums will be refunded with interest cash (lump sum). the death benefit paid will be what the premium would have purchased at the correct age. A) Bank loans Which of these is considered to be a Living Benefit option in a life insurance policy? You can get your paper edited to read like this. A nonforfeiture clause is an insurance policy clause that is included in standard life insurance and long-term care insurance. $50,000 minus any outstanding policy loans. a) A client with amyotrophic lateral sclerosis (ALS) tells the nurse, "Sometimes I feel so frustrated. Quickly and professionally. C) Settlement options Using this, plot the residuals from the final regression equation created in step (b) against the values of Y that were fitted. B) Nonforfeiture B) dies of a stroke Which of these require an offer, acceptance, and consideration? A) Insured becomes unemployed d) Reduced Paid-Up Insurance. The Consideration clause in a life insurance policy indicates that a policyowners consideration consists of a completed application and. C) completely and permanently disabled Amount of premium payments and when they are due. The common disaster provision states the insurer will continue as if, A) the insured outlived the beneficiary C) Allows for a full refund after policy delivery All of the following are optional methods of settlement after the insured has died EXCEPT life income option. Which of these life insurance riders allows the applicant to have excess coverage? C) Reinstatement period B) Probation period What is an insurance policys grace period? 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 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 Dorian exercised a nonforfeiture option by using his life policys cash value to purchase an extended term insurance option. Under an extended term nonforfeiture option, the policy cash value is converted to The payable premium amount steadily declines throughout the duration of the contract. B) The full original death benefit listed on the policy B) past due premiums that have not been paid by the end of the grace period D) Settlement options. 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 Diffusion Let us complete them for you. All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT. P cannot assign ownership of the policy while premiums are being waived, Which of these are NOT an example of a Nonforfeiture option? a) A client with amyotrophic lateral sclerosis (ALS) tells the nurse, "Sometimes I feel so frustrated. C) policy and any verbal agreements 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 How do life insurance companies handle cases where the insured commits suicide within the contracts stated Contestable period? It is tax deductible Cash surrender value applies to the savings element of whole life insurance policies. D) hazardous occupations. C) all remaining cash values are paid to the policyowner Why would you not want to prepare financial statements D) Nonforfeiture clause. Five years later, T commits suicide. reduced paid - up insurance cash value . A) Accidental death rider Nonforfeiture values give the insured the right to the cash value even if the policy lapses or is surrendered. 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. A) Entire contract period Which military service exclusion clause would pay upon his death? Past-due interest on a policy loan is added to the total debt D) It allows for a third party to purchase a life insurance policy at a discounted rate and immediately advance a portion of the death benefit, C) It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill. A life insurance policy can be surrendered for its cash value under which policy provision? \text { Rent Expense } & 229,000 & \\ D) Reduced Paid-Up Insurance. D) buy additional insurance coverage, All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT, A) Extended Term Insurance D) Decreasing term insurance, A provision that allows a policyowner to withdraw a policys cash value interest free is a(n), A) partial surrender D) Premium decrease. 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. B) Face amount of the new policy equals that of the original policy D) war. \hline \text { Cash } & \$ 3,100 & \\ A life insurance policy normally contains a provision that restricts coverage in the event of death under all of the following situations EXCEPT. C) Pay full benefits as stated in the policy The policy value, therefore, should reflect the effects of inflation upon the economy. One of the questions on the application asks if P engages in scuba diving, to which P answers "No". C) Annuity rider B) absolute assignment All of the following are true of Key Employee life insurance EXCEPT a) The death benefit is free from income taxes. Term vs. c) Reducation of Premium 2. While investigating the claim, the insurer discovered material misrepresentations made by P during the application process. Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value. C) Policys cash value is not affected Insurance companies can charge an interest rate based on the policyowners credit report, Past-due interest on a policy loan is added to the total debt. B) The insurers obligation to return all premiums upon an approved death claim 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? 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. ", NAIC.org. How to use nonforfeiture in a sentence. The insurance company guarantees a minimum cash value for the insurancepolicy after a specific period, typically three years from when the policy starts. The above question All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT, Was part of Insurance MCQs & Answers. How many first time home buyers did you work with last year? Refer to the earlier problem. A) Optional rider Which life policy is designed to provide the policyowner a hedge against the effects of inflation? D) the insured and beneficiary died at the same time. C) the right to change a policy provision C) the outstanding policy loan balance C) The entire cash value is taxable A policy loan is issued by an insurance company and uses the cash value of a life insurance policy as collateral. In a life insurance policy, which provision states who may select policy options, designate and name a beneficiary, and be the recipient of any financial benefits from the policy? B) 1/2 of the policys face amount A criminal conviction is required for civil forfeiture. 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 death benefit would be equal to the benefit in the original whole life insurance policy. AzAnswer team is here with the right answer to your question. D) accidental death. If an insured dies because of an accident, which type of life insurance rider will provide additional coverage? After a policy has lapsed, which provision allows the insured to continue coverage?
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