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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). A) Cash surrender Required fields are marked *, All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT. When assessing a client with partial-thickness burns over 60% of the body, which finding should the nurse report immediately? B) past due premiums that have not been paid by the end of the grace period Which life policy is designed to provide the policyowner a hedge against the effects of inflation? Insurers require policyholders to have paid at least three years of premiums before they can be eligible for paid-up insurance. D) Reduced Paid-Up Insurance. 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. An automatic premium loan is not considered a Nonforfeiture Option. D) $4,000 For traditional whole-life policies, the policyholder decides how they would like to access the policys cash value. 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 The policy is then issued with no scuba exclusions. B) Disability income rider You can find out more about our use, change your default settings, and withdraw your consent at any time with effect for the future by visiting Cookies Settings, which can also be found in the footer of the site. 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 Which nonforfeiture option has the highest amount of insurance protection? See the bus stats for the Lincolnville School District. 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. cash (lump sum). A) Net death benefit will be reduced if the loan is not repaid C) Guaranteed insurability Georgia requires legal actions to be brought forth no sooner than 60 days and no later than 3 years after proof of loss. B) Before payment of the benefit is made, specific conditions must exist, such as suffering from a terminal illness A double indemnity benefit will be payable to Matts beneficiary if Matt, A) is killed while committing a felony Which of these is considered to be a Living Benefit option in a life insurance policy? Past due premiums are waived C) waiting period There are currently two common types of nonforfeiture benefits being offered with certain insurance policies covering long term care services. All of the following are nonforfeiture options EXCEPTo paid-up additions extended term insurance. Rapid depletion of proceeds can be avoided C) completely and permanently disabled \text { Equipment } & 625,000 & \\ C) Waivers In what part of an insurance policy are policy benefits found? C) all remaining cash values are paid to the policyowner Reduced Premium. b. AILife.com. His insurance policy continues in force without payment of further premiums. B) Cash Surrender The term policy ends after a fixed number of years as detailed in the policys nonforfeiture table. How do life insurance companies handle cases where the insured commits suicide within the contracts stated Contestable period? 1. Cash Surrender C) The entire cash value is taxable computer. Which of the following statements about accumulated interest earned on dividends from an insurance policy is TRUE? Such an option considers the saving component of the policy. 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. Diffusion Let us complete them for you. C) Reduced paid-up insurance 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. Dorian exercised a nonforfeiture option by using his life policys cash value to purchase an extended term insurance option. B) Waiver of premium rider B) Nonparticipating policies issue dividends C) Incontestability A) Incontestable period Which of the following is NOT part of an insurance contract? A nonforfeiture clause is an element included in standard life insurance and long-term care insurance. B) Exclusion D) Accelerated death benefit, Barbaras policy includes a rider which allows her to purchase additional insurance at specific dates or events without evidence of insurability. Life insurance is a contract in which an insurer, in exchange for a premium, guarantees payment to an insureds beneficiaries when the insured dies. Modify a provision in the insurance contract Coverage will be adjusted to reflect the insureds true age if a misstatement of age is discovered. With the cash surrender value option, the policy owner terminates the policy and receives the remaining cash value within six months. B) payor provision 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 extended-term payout option allows the policy owner to buy an extended-term policy using the cash values from the original policy. Correct answer: (D) c. Inventory. 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? C) no beneficiary was ever named The nonforfeiture benefits clause allows the owner to choose full benefits or partial benefits when the premium can no longer be paid starting after a certain number of years. Which of these is NOT a type of agent authority? B) payor rider Cash A) The face amount and policy premium are not affected by the payment The common disaster provision states the insurer will continue as if, A) the insured outlived the beneficiary C) Suicide clause B) absolute assignment The Structured Query Language (SQL) comprises several different data types that allow it to store different types of information What is Structured Query Language (SQL)? Which statement is correct regarding the premium payment schedule for whole life policies? Which of these arrangements allows one to bypass insurable interest laws? D) Grace period provision. \text { Common Stock } & & 279,500 \\ A) Optional rider C) aviation a. Prepaid Rent. Fixed Period 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. The owner gets the cash surrender value in cash, either partially or in full. Use the accumulated cash value to pay the remaining future premiums. 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. P cannot borrow against the policys cash value while disabled A) $400 B) $800 C) $2,000 D) $4,000. D) Premiums must continue to be paid. C) Dividends are always taxable B) Cash Dividend Option C) minus indebtedness and without interest C) $2,000 How are surrender charges deducted in a life policy with a rear-end loaded provision? d. What price range is your specialty? Which of these life insurance riders allows the applicant to have excess coverage? All of the following are true of Key Employee life insurance EXCEPT a) The death benefit is free from income taxes. B) the policy would be payable only after the beneficiary makes past due premium payment Which of the following does a policyowner NOT have a right to change? B) Status A nonforfeiture clause is an insurance policy clause that is included in standard life insurance and long-term care insurance. C) transferable assignment In most cases, the surrender cash value may be different from the cash value due to the policy owner. A) Accelerated death benefit rider C) A return of excess premium and not taxable She has been working in the financial planning industry for over 20 years and spends her days helping her clients gain clarity, confidence, and control over their financial lives. fixed-period option. Interest only is a settlement option. All of the following statements are true regarding a policy's Grace period EXCEPT Past due premiums are waived Policy loans may still be made Full coverage continues Grace period terms are stated in the policy You can get your paper edited to read like this. f. Six months interest at 8% on the note was paid on September 30. Which of these require an offer, acceptance, and consideration? a) A client with amyotrophic lateral sclerosis (ALS) tells the nurse, "Sometimes I feel so frustrated. 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? A) 12/15th of the policys face amount Five years later, T commits suicide. D) accidental death. Paid-up additional insurance is whole life insurance that a policyholder purchases using the policys dividends. D) Life income annuity. the policy may be paid up early by using policy dividends. Which type of rider will waive the premium on a childs life insurance policy if the parent paying the premium dies? 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. PracticeTest Flashcards by Gabriel Martinez | Brainscape When a life insurance policy is surrendered, how does the cost recovery rule apply? h. Supplies. What does the grace period allow a life insurance policyowner to do? In order to convert the engine type (diesel or gasoline) to a qualitative variable, first add a variable. A claimant wants to bring a recovery action against an insurance company for a loss claimed under a policy. D) hazardous jobs, A provision in a whole life policy that allows a policyowner to terminate the policy in return for a reduced paid-up policy of the same type is called a(n), A) insuring clause Life insurance policyholders can select one of four nonforfeiture benefit options: the cash surrender value, extended term insurance, loan value, and paid-up insurance. "What Are Life Insurance Non-Forfeiture Options? The rest are all possible exclusions. C) Term life policies are the only type of insurance that allows policy loans What is the name of the provision which states that a copy of the application must be attached to the policy when issued? dividend amount used toward purchase With extended-term insurance, the face amount of the policy stays the same, but it is flipped to an extended-term insurance policy. fare-paying passenger. B) the beneficiary outlived the insured 40% taxable, similar to a capital gain B. the benefit can be offered as a rider at a specific extra cost or may be at no cost. Policyholders can choose to access the policy's cash value through cash . 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. If an insured dies because of an accident, which type of life insurance rider will provide additional coverage? B) A return of excess of premium and fully taxable When a misrepresentation on a life insurance policy application is discovered, what action may an insurance company take? ", "Standard nonforfeiture law for life insurance.". C) Paid-up option C) dies instantly from a car accident Which life insurance rider typically appears on a Juvenile life insurance policy? Which military service exclusion clause would pay upon his death? What provision can Sheila add to her policy to address this concern? C) Accelerated rider All of the following are Nonforfeiture options EXCEPT a Reduced paid-up b Interest only c Cash surrender d Extended term 6: Which of the following is guaranteed to the policyowner through nonforfeiture values? A) Entire contract period C) disability Past-due interest on a policy loan is added to the total debt Usually, permanent life insurance generates low returns in the early years of the policy due to administrative and acquisition expenses. It is tax deductible Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options? Ike purchases a whole life policy. It is taxed as capital gains A) The original face amount will be paid to the beneficiary Sometimes, a policy expires after a so-called grace period. C) Paid-Up Additions Option PDF Long-term Care Insurance D) Automatic premium loans, The automatic premium loan provision authorizes an insurer to withdraw from a policys cash value the amount of, A) any interest payable from an outstanding policy loan balance All of the following life insurance policies develop a cash value EXCEPT term life insurance. The interest credited under this option is TAXABLE, whether or not the policyowner receives it. Exam Review #1 Flashcards | Chegg.com Cash surrender value applies to the savings element of whole life insurance policies. 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? She is concerned, however, that if she becomes disabled she will be unable to pay the premiums as they come due. When does a Guaranteed Insurability Rider allow the insured to buy additional coverage? B) Pay age-corrected benefits Which of these is NOT considered to be a common life insurance nonforfeiture option? \textbf{December 31, 2019} C) take out a policy loan A) Active C) Return of premium provision 3. Flashcards - life policy provisions D) Premium decrease. C) It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill Quickly and professionally. Just like with a conventional loan, youll be charged interest that could range from 5% to 9% on the loan. Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it? A waiting period must pass before becoming eligible for benefits B) Free look period Work with our consultant to learn what to alter. Amount of premium payments and when they are due. If the consumer price index has gone up 4%, how much may Ron increase the face value of the policy? In personum actions are against the owner of property, whereas in rem actions are taken . 4. B) Face amount of the new policy equals that of the original policy Mike buys a 10-year renewable term policy. Some companies offer an annuity option in the nonforfeiture clause. All of the following are true regarding a decreasing term policy EXCEPT The insured's premiums will be waived until she is 21. 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. 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) Reinstatement period C) Accidental Death Rider B) nonforfeiture option A) Reduce premium C) accident Asset Forfeiture Laws by State - FindLaw In the early years of a policy, life insurance companies can deduct fees upon cash surrender. B) Grace period Insured must be eligible for Social Security disability for claim to be accepted Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. N dies September 15. This provision is usually provided with an increase in premium 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. Salaries and Wages Payable. a) Both irrevocable and Revocable. Cash surrender value b. at future dates specified in the contract with no evidence of insurability required, Additional coverage can be added to a Whole Life policy by adding a(n). d) Revocable Revocable beneficiares can be changed at any point. 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 provision will pay a portion of the death benefit prior to the insureds death due to a serious illness? Charitable gift of life insurance is a way of contributing to charity by taking out life insurance on yourself and naming a charity as a beneficiary. A) Payor options RogersCoprorationUnadjustedTrialBalanceDecember31,2019, AccountDebitCreditCash$3,100AccountsReceivable15,900Supplies4,200PrepaidRent9,500Equipment625,000AccumulatedDcprcciation$104,000OtherAssets60,900AccountsPayable9,400UnearnedServiceRevenue11,200NotePayable(due2022)50,000CommonStock279,500RetainedEarnings,12/31/201837,000ServiceRevenue598,000WagesExpense137,000RentExpense229,000InterestExpense4,500Totals$1,089,100$1,089,100\begin{array}{lrr} 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.. 2. Which of the following would NOT be an exclusion in a long-term care policy? d) Alzheimer's disease While normally mental and nervous disorders or disease are excluded in long-term care policies, Alzheimer's disease is not. g. Salaries and Wages Expense C) Paid-up additions What will the beneficiary receive if the insured dies during this Grace Period? Permanent life insurance, long-term disability, and long-term care insurance policies may have nonforfeiture clauses. All of these are valid policy dividend options for a life insurance policyowner EXCEPT Kurt is an active duty serviceman who was recently killed in an accident while home on leave. Claims are denied under the Suicide clause of the policy, Which of these statements about a Guaranteed Insurability Option rider is NOT TRUE? All or Nothing is, for this year and maybe for good, nothing An analysis indicates that prepaid rent on December 31 should be $2,300. 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) Conversion b) Decreasing Term c) Reduced Paid-up d) Extended Term. A) Waiver Kurt is an active duty serviceman who was recently killed in an accident while home on leave. Quickly and professionally. C) suicide Which of the following is NOT a common life insurance policy rider? \textbf{Rogers Coproration}\\ A sub-agent cannot take or sign an application. b) The key employee has premiums deducted from his salary. However, when the policy is terminated or the owner surrenders the policy, the death benefit ceases to exist. Standard life insurance and long-term care insurance policies may have a nonforfeiture clause. She can reestablish coverage under which of the following provisions? Accumulation at Interest D) war. M had an annual life insurance premium payment due January 1. All of the following are Nonforfeiture options EXCEPT: . Reduce your coverage for the remaining term of the policy and pay no futurepremiums. All of the following are Nonforfeiture options EXCEPT a) Reduced paid-up b) Interest only c) Cash surrender d) Extended term b) Interest only Nonforfeiture values include cash surrender, extended term and reduced paid-up. C) resubmit a new life insurance application D and his wife divorce and D remarries, transferring ownership of his policy to his new wife. 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) Extended term option The insured partys coverage can be terminated automatically when the policyholder fails to make premium payments or when he/she surrenders the policy. B) Entire Contract clause When you visit the site, Dotdash Meredith and its partners may store or retrieve information on your browser, mostly in the form of cookies. The extended-term insurance also helps the policy owner to quit paying premiums for the original policy, but retain the equity accumulated in the policy. Both are in excellent health. B) $800 Who does the sub-agent represent? C) Annuity rider revoke an absolute assignment Unit 6 Flashcards by Lauren Pulido | Brainscape Set the qualitative parameters if the engine type is gasoline. D) Beneficiary. Who the policyowner is and what rights the policyowner is entitled to. 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. D) Provision. What is an insurance policys grace period? B) The insurer withholds the cost basis 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. C) Return of premium Universal life (UL) insurance is permanent life insurance with an investment savings component. C) Entire Contract An insured is past due on his life insurance premium, but is still within the Grace Period. Cash Surrender, A Return of Premium life insurance policy is. The insurance company guarantees a minimum cash value for the insurancepolicy after a specific period, typically three years from when the policy starts. B) accumulate without interest Which of these would be considered a Limited-Pay Life policy? Recent Examples on the Web This relatively unknown nonforfeiture option is called a life settlement. Let us have a look at your work and suggest how to improve it! d) 6 months Pre-existing conditions must be covered after a policy has been in force for 6 months. B) Waiver of premium For example, if you purchase a policy when you were 20 and you paid until age 55, you would receive a term policy that is less than 35 years. He forgot to pay the premium that was due last week. Insured must be totally disabled to qualify, Insured must be eligible for Social Security disability for claim to be accepted. B) Juvenile waiver To keep advancing your career, the additional CFI resources below will be useful: Within the finance and banking industry, no one size fits all. The option allows the policyholder to retain the death benefit without being required to make additional future premium payments. I hope you got the correct answer to your question. D) hazardous occupations. B) Extended term insurance She died January 10 without making the premium payment. S has a Whole Life policy with a premium payment due soon. C) Nonforfeiture provision B) unemployed When is the face amount of a Whole Life policy paid? A) The policys cost basis is taxable B) Age C) the outstanding policy loan balance How is a life insurance policy dividend legally defined? D is the policyowner and insured for a $50,000 life insurance policy. suicide. Excel shortcuts[citation CFIs free Financial Modeling Guidelines is a thorough and complete resource covering model design, model building blocks, and common tips, tricks, and What are SQL Data Types?