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A father owns a life insurance policy on his 15-year-old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums?
A The insured will have to pay premiums for 6 months. If at the end of this period the father is still disabled, the insured will be refunded the premiums.
B The insured's premiums will be waived until she is 21.
C The premiums will become tax deductible until the insured's 18th birthday.
D Since it is the policyowner, and not the insured, who has become disabled, the life insurance policy will not be affected. - ANSWER- B. The insured's premiums will be waived until she is 21.
Which of the following policy components contains the company's promise to pay? A Entire contract provision
B Insuring clause C Premium mode
D Consideration clause - ANSWER- B. Insuring Clause
Which nonforfeiture option provides coverage for the longest period of time? A Extended term
B Paid-up option
C Accumulated at interest
D Reduced paid-up - ANSWER- D. Reduced Paid-Up
The validity of coverage under a life insurance policy may not be contested, except for nonpayment of premium, after the policy has been in force for at least how many years? A 1 year
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B 2 years C 5 years
D 7 years - ANSWER- B. 2 years
Which of the following is TRUE about nonforfeiture values?
A A table showing nonforfeiture values for the next 10 years must be included in the policy.
B Policyowners do not have the authority to decide how to exercise nonforfeiture values.
C They are required by state law to be included in the policy.
D They are optional provisions. - ANSWER- C. They are required by state law to be included in the policy.
What is the term for how frequently a policyowner is required to pay the policy premium? A Consideration
B Mode
C Schedule
D Grace period - ANSWER- B Mode
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