C) Insuring clause A criminal conviction is required for civil forfeiture. C) Policys cash value is not affected B) Decreases the policys cash value 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. reduced paid-up insurance. A) Cash surrender C) take out a policy loan D) Full face amount. 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. Which statement is true regarding policy dividends? Which of the following statements is true? Reduced Premium. 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. Ron has a life insurance policy with a face value of $100,000 and a cost of living rider. B) Make a premium payment after the due date without any loss of coverage B) Status What will the insurer pay to Ps beneficiary? What is an insurance policys grace period? AzAnswer team is here with the right answer to your question. A physical inventory shows that$650 of office supplies is on hand. C) Paid-up additions The owner gets the cash surrender value in cash, either partially or in full. If cash has accumulated in the policy, state law forbids companies from keeping it and cancelling the policy. Which of these features would limit the insurers obligation in the event N was killed while flying as a student pilot? C) Incontestable clause One of the questions on the application asks if P engages in scuba diving, to which P answers "No". C) Waivers A) A return of excess premium and partially taxable a) Both irrevocable and Revocable. A) The policys cost basis is taxable Using this, plot the residuals from the final regression equation created in step (b) against the values of Y that were fitted. In what part of an insurance policy are policy benefits found? B) during the last 12 months A life insurance policyowner was injured in an automobile accident which results in a total and permanent disability. 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. Which of these is NOT considered to be a common life insurance nonforfeiture option? C) Suicide clause C) completely and permanently disabled 2003-2023 Chegg Inc. All rights reserved. It is taxed as ordinary income. What action will an insurer take if an interest payment on a policy loan is not made on time? How are acts of war and aviation treated under a group life insurance policy? \text { Equipment } & 625,000 & \\ Accumulation at Interest Eric purchased a cash value life insurance policy six years ago. C) minus indebtedness and without interest Cash surrender value applies to the savings element of whole life insurance policies payable before death. A) Increases the policys cash value Dorian exercised a nonforfeiture option by using his life policys cash value to purchase an extended term insurance option. C) Return of premium provision D) experiencing financial hardship. A) Reduce premium The common disaster provision states the insurer will continue as if, A) the insured outlived the beneficiary The term policy ends after a fixed number of years as detailed in the policys nonforfeiture table. A) The original face amount will be paid to the beneficiary A) Waiver D) beneficiary assignment, Mike and Ike are 30 year old identical twins. Which of these is NOT a valid policy dividend option? Home Flashcards Chapter 4- Policy Provisions, Options and Riders (Exam 2), A waiver of premium rider allows an insured to waive premium payments if the insured is, A) temporarily disabled One life insurance policy provision permits the policyholder to pledge certain rights in the life insurance policy to secure a loan. a) A client with amyotrophic lateral sclerosis (ALS) tells the nurse, "Sometimes I feel so frustrated. Paid-up additional insurance is whole life insurance that a policyholder purchases using the policys dividends. D) Payor benefit. Diffusion Let us complete them for you. B) military service b) The key employee has premiums deducted from his salary. 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 C) Premium increase 2. 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 4. 609.5315. Set the qualitative variable to 0 if the engine type is a diesel. B) add-on C) nonforfeiture option. A life insurance policy which ensures that the premium will be paid if the insured becomes disabled has what kind of rider attached? D) Grace period. What kind of rider did S include on the policy? Compute SYXS_{Y X}SYX and interpret your findings Compute the MADM A DMAD and interpret your findings. A life insurance policy normally contains a provision that restricts coverage in the event of death under all of the following situations EXCEPT. This provision is usually provided with an increase in premium 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. There are currently two common types of nonforfeiture benefits being offered with certain insurance policies covering long term care services. What will the beneficiary receive if the insured dies during this Grace Period? fixed-period option. D is the policyowner and insured for a $50,000 life insurance policy. B) Reinstatement provision A person may have a vested interest in property to be forfeit in two ways: In personum jurisdiction and in rem jurisdiction. What time period allows an insureds life insurance policy to remain in force even if the premium was not paid on the due date? D) Cash surrender. C) Extended term option The option allows the policyholder to retain the death benefit without being required to make additional future premium payments. All of the following are true regarding a decreasing term policy EXCEPT The insured's premiums will be waived until she is 21. B) settlement option B) Disability income rider C) Paid-Up Additions Option Interest only is a settlement option. Modify a provision in the insurance contract How much will Ds beneficiarys receive? B) Free look period 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. C) Paid-up option He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem. \text { Totals } & \underline{\underline{\$ 1,089,100}} & \underline{\underline{\$ 1,089,100}} 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). B) Exclusion C) Settlement options D) a source of funding a term rider to the policy, A) the policy loan value which the insured may borrow against. 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 of these would limit a companys liability to provide insurance coverage? d) The key employee is the insured. D) Reduced Paid-Up Insurance. D) Nonforfeiture options. C) Return of premium C) Cash value is surrendered to policyowner C) Accelerated rider Each takes out a $500,000 life insurance policy on the other, naming himself as primary beneficiary. Reduce your coverage for the remaining term of the policy and pay no futurepremiums. Which of the following statements about accumulated interest earned on dividends from an insurance policy is TRUE? Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it? B) Cash Dividend Option Past-due interest payments not paid after 3 months will void the policy Are you having trouble answering the question All of the following are nonforfeiture options, EXCEPT:? B) Application D) Allows the insured to convert a term life policy to whole life with no evidence of insurability, B) Purchase additional coverage with no evidence of insurability required, Loans obtained by a policyowner against the cash value of a life insurance policy, A) are treated as taxable income 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. 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. Let us have a look at your work and suggest how to improve it! B) automatic premium loan Feel free to get in touch with us via email. from October 1 to December 31 is unpaid and unrecorded. B) Age Or if you were 35 when you purchased your policy and you paid until you were 45, you would receive a term policy less than 10 years. Amount of premium payments and when they are due. Increased proceeds can be provided through accumulation of interest C) all past premiums will be refunded with interest c. What is your commission? Nonforfeiture clauses offer protection in the event a policyholder stops paying their premium. However, during the early years of awhole life insurance policy, the savings portion brings little return compared to thepremiumspaid. Accounting Cycle and Classifying Accounts, Adjusting Accounts for Financial Statements, Asset Demand and Supply under Uncertainty, Business Analytics & Technology Management Chapter 2, Business Analytics & Technology Management Chapter 3, Business Analytics & Technology Management Chapter 4, Business Analytics & Technology Management Chapter 5, Business Analytics & Technology Management Chapter 6, Capital Budgeting and Managerial Decisions, Derivative Instruments and Hedging Activities, External Financial Statements and Revenue Recognition, Financial Intermediaries and Financial Markets, Financial Markets and Securities Offerings, Financial Statements and Accounting Transactions, Integrated Marketing Communications and Direct Marketing, Interactive Marketing and Electronic Commerce, Interpersonal and Organizational Communication, Introduction to Human Resource Management, Introduction to Human Resources Assessment, Managerial Accounting Concepts and Principles, Market Segmentation Targeting and Positioning, Organization and Operation of Corporations, Organizational Markets and Buyer Behaviour, Profitability Analysis and Analytical Issues, Profitability Analysis and Decentralization, Reporting and Analyzing Long Lived Assets, Responsibility Accounting and Performance Measures, Understanding Interest Rates Determinants. 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 (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). Some companies offer an annuity option in the nonforfeiture clause. 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? Each brother purchases a life policy that has a $750 annual premium. Which rider provides coverage for a child under a parents life insurance policy? The nonforfeiture benefit is designed to ensure that if you lapse your policy (i.e., stop paying premiums) after a specified number of years, you retain some benefits from the policy.