all of the following are nonforfeiture options except

A) Waiver of premium A life insurance policyowner was injured in an automobile accident which results in a total and permanent disability. \text { Equipment } & 625,000 & \\ 40% taxable, similar to a capital gain B. He forgot to pay the premium that was due last week. 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 life policy is designed to provide the policyowner a hedge against the effects of inflation? "What Are Life Insurance Non-Forfeiture Options? Whole Life Insurance: Whats the Difference? C) Reinstatement period A) Insuring clause Primerica Flashcards | Flashcards.io B) A return of excess of premium and fully taxable o paid - up additions extended term insurance . Cash Surrender D) pay past due premiums, agree to a reduction in coverage, B) provide evidence of insurability, pay past due premiums. However, any money you take out will be deducted from the death benefit that goes to your beneficiaries. All of the following are TRUE statements regarding the accumulation at interest option EXCEPT The interest credited under this option is not taxable since it remains inside the insurance policy. B) Purchase additional coverage with no evidence of insurability required B) the coverage can be extended with a lump sum payment Flashcards - life policy provisions The death benefit would be equal to the benefit in the original whole life insurance policy. Which of these is NOT a characteristic of the Accelerated Death Benefit option? Some states require a provision limiting the time parameters in which a claimant may seek recovery from an insurer under a policy. P is the insured on a participating life policy. The policy value, therefore, should reflect the effects of inflation upon the economy. Eric purchased a cash value life insurance policy six years ago. The insurer will deduct the outstanding loan balance from the. Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. D) policy and attached application, Ownership of a life insurance policy may be temporarily transferred with a(n), A) collateral assignment Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value. A life insurance policy normally contains a provision that restricts coverage in the event of death under all of the following situations EXCEPT. The length of time when the new policy will be in force will depend on the cash values available from the original policy and the age of the insured party at the time the person chooses the extended-term option. B) Waiver of premium D) war, An insured individual and the policys beneficiary die from the same accident. \textbf{December 31, 2019} reduction of premium Which situation accurately describes a reduced paid-up nonforfeiture option? A) Accidental death rider Which of the following is the process of getting oxygen from the environment to the tissues of the body? The common disaster provision states the insurer will continue as if, A) the insured outlived the beneficiary Insurance companies can send delinquent interest accounts to a collection agency D) a source of funding a term rider to the policy, A) the policy loan value which the insured may borrow against. ? The full face amount is available as an accelerated benefit \text { Other Assets } & 60,900 & \\ In what part of an insurance policy are policy benefits found? Azanswer team is here with the correct answer to your question. D) accidental death. Which statement is true regarding policy dividends? A young, married teacher has two children and owns a Whole Life policy. This provision is usually provided with an increase in premium c) Beneficiary's consent The four essential elements of all legal contracts are offer and acceptance, consideration, competent parties, and legal purpose. C) suicide Which nonforfeiture option has the highest amount of insurance protection? Overall, it's the accumulated portion of a permanent life insurance policy's cash value that is available to the policyholder upon surrender of the policy. A) Reduce premium \text { Account } & \textbf { Debit } & \textbf { Credit } \\ 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 He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem. S buys a $10,000 Whole Life policy in 2003 and pays an annual premium of $100. B) the policy would be payable only after the beneficiary makes past due premium payment B) accumulate without interest C) waiting period B) It allows for policy loans to be advanced to the insured in the event of unemployment d. An analysis indicates that unearned service revenue should be$3,120. 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. B) The full original death benefit listed on the policy The policy would retain a cash value component, but it would grow at a reduced rate. In a reduced paid-up insurance option, the policy owner receives a lower amount of payments made as premiums for the original whole life insurance. Usually, permanent life insurance generates low returns in the early years of the policy due to administrative and acquisition expenses. Under a life insurance policy, what does the insuring clause state? c) The business is the owner and beneficiary of the policy. 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 B) automatic premium loan B) Decreases the policys cash value The policyis calculatedfrom the insureds attained age. B) Face amount of the new policy equals that of the original policy Which of these actions is taken when a policyowner uses a Life Insurance policy as collateral for a bank loan? Cash Taxable *Dividends are a return of unused premiums on which the insured has already paid taxes. S has a Whole Life policy with a premium payment due soon. Which nonforfeiture option has the highest amount of insurance protection? Of the following dividend options, which of these is taxable? C) Paid-up additions Structured Query Language (known as SQL) is a programming language used to interact with a database. Excel Fundamentals - Formulas for Finance, Certified Banking & Credit Analyst (CBCA), Business Intelligence & Data Analyst (BIDA), Commercial Real Estate Finance Specialization, Environmental, Social & Governance Specialization, Cryptocurrency & Digital Assets Specialization (CDA), Business Intelligence Analyst Specialization, Commercial Banking & Credit Analyst (CBCA), National Association of Insurance Commissioners (NAIC), Financial Planning & Wealth Management Professional (FPWM). If Ron goes to a doctor who is not a PPO provider, what will happen? The correct answer is "Automatic Premium Loan Option". AzAnswer team is here with the right answer to your question. When the term insurance expires, A) he has the option of resuming the original policy and paying the same premium A) Insured becomes unemployed fixed-period option. Each brother purchases a life policy that has a $750 annual premium. A Its premium steadily decreases over time, in response to its growing cash value. \end{array} If an insureds age on a life insurance policy has been misstated, what is the insurers liability if the insured dies? What Is a Nonforfeiture Clause? 4 Payout Options Explained - Investopedia C) disability Ron has a life insurance policy with a face value of $100,000 and a cost of living rider. Also, any outstanding amounts on the insured partys coverage are deducted from the cash value. C) Accelerated death benefit Which situation accurately describes a reduced paid-up nonforfeiture option? Individual insurance 2. a The premiums on their policy will never increase. 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? C) dies instantly from a car accident The owner gets the cash surrender value in cash, either partially or in full. PracticeTest Flashcards by Gabriel Martinez | Brainscape The beneficiary is Ds wife. A) Cash surrender Which statement is correct regarding the premium payment schedule for whole life policies? D) Conditions. All of the following are dividend options EXCEPT: Fixed-period installments. A) dividend option B) settlement option C) nonforfeiture option D) interest-only option. Quickly and professionally. Are you having trouble answering the question All of the following are nonforfeiture options, EXCEPT:? B) $800 All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT. C) Extended term option Past-due interest payments not paid after 3 months will void the policy Asset Forfeiture Laws by State - FindLaw a. C) It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill D) Reinstatement, A whole life policy option where extended term insurance is selected is called a(n), A) dividend option Which of these are NOT an example of a Nonforfeiture option? AILife.com. B) Insured becomes totally disabled B) Before payment of the benefit is made, specific conditions must exist, such as suffering from a terminal illness B) dies of a stroke 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. The face amount equal to the cash value. What will the beneficiary receive if the insured dies during this Grace Period? B) payor rider All of the following are nonforfeiture options, EXCEPT: d) Reduced Paid-Up Insurance. Exam Review #1 Flashcards | Chegg.com XCEL Chapter 4 Part 2 Flashcards | Quizlet B) Nonparticipating policies issue dividends d. What price range is your specialty? The action must be brought a) Within 2 years. Explain your reasons. Surrender Value: What's the Difference? C) Accidental Death Rider D) the protection ends. Which of the following is NOT part of an insurance contract? When a policy is in force for a longer duration, the better the cash values and the nonforfeiture values. Modify a provision in the insurance contract Which of the following areas do errors commonly occur on applications and for which the incontestable clause does NOT apply? Past-due interest on a policy loan is added to the total debt ", NAIC.org. Nonforfeiture Benefits for Life Insurance | Life Benefits When does a life insurance policys waiver of premium take effect? The business pays the premiums that are not deductible, but the death is free from income taxes. 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. The insurance company charges a surrender fee to the policy owner to cover expenses incurred in recording the policy in the companys books and any administrative expenses incurred. One life insurance policy provision specifies that the insurer cannot deny payment to the beneficiary because of concealment or misrepresentation if the life insurance policy has been in force for two years during the insured's lifetime. A) Active Pay face amount minus the past due premium. A) Payor options C) Address A Tax deductible. 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. She can reestablish coverage under which of the following provisions? Kurt is an active duty serviceman who was recently killed in an accident while home on leave. c. Inventory. Standard life insurance and long-term care insurance policies may have a nonforfeiture clause. Which of the following would NOT be an exclusion in a long-term care policy? Ron joins the PPO provided by his employer. The policy is then issued with no scuba exclusions. Whose life is covered on a life insurance policy that contains a payor benefit clause? His $100,000 Whole life policy contains a War Exclusion clause. 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 Cash surrender value applies to the savings element of whole life insurance policies payable before death. D) irrevocable assignment. Accumulation at Interest C) aviation A) The original face amount will be paid to the beneficiary An insureds inability to perform two or more activities of daily living may trigger which type of policy rider? When you visit the site, Dotdash Meredith and its partners may store or retrieve information on your browser, mostly in the form of cookies. a) Modified life b) Variable life c) Ordinary life d) Graded premium whole life. Which life insurance policy provision will permit Elaine to use the life insurance proceeds before she dies to pay for her medical care? C) Cash value is surrendered to policyowner D) Grace period. Her doctor said that her only chance of survival is an experimental treatment. Instead, there are four options that the owner can choose from in order to access the accumulated cash value. Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value. A) Incontestable period How is a life insurance policy dividend legally defined? Long Term Care: Optional Benefits | Department of Financial Services The nonforfeiture clause may also become available when the holder of a whole life insurance policy surrenders the policy. A) It allows for a spouse to be added as a rider to a life insurance policy A policyowner may exercise which of these dividend options that uses the dividend to pay all or part of the next premium due? Which dividend option would an insurer invest the policyowners money and add any interest earnings as the dividends accrue? Annuities pay regular payments as outlined in the contract. For some companies, this option may be automatic when surrendering a whole life insurance policy. 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) Accelerated rider D) grace period. computer. 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. B) war How much will Ds beneficiarys receive? 2. C) Reduction of Premium 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 Which of these describe a participating life insurance policy? The extended-term payout option allows the policy owner to buy an extended-term policy using the cash values from the original policy. Fin 351 Flashcards | Chegg.com Explanation: (Life Insurance Policy Provisions, Options and Riders)There are only three non-forfeiture options: 1) Cash Surrender, 2) Reduced Paid-Up and the automatic option, 3) Extended Term. Which of the following statements is true? Use the accumulated cash value to pay the remaining future premiums. The same face amount as in the whole life policy. 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 non-payment. Elaine was diagnosed with a terminal illness. However, during the early years of awhole life insurance policy, the savings portion brings little return compared to thepremiumspaid. Sometimes, a policy expires after a so-called grace period. Life insurance is a contract in which an insurer, in exchange for a premium, guarantees payment to an insureds beneficiaries when the insured dies. B) Cash Dividend Option 9 Q What kind of policy does NOT typically require proof of insurability? C) A prorated death benefit based on the amount of insurance the insureds premiums would have been if purchased at the correct age B) Cash Surrender B) The policy may be paid up early by using policy dividends 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. A) Waiver C) Dividends are always taxable D) The agents obligation to pay a death benefit upon an approved death claim, C) The insurers obligation to pay a death benefit upon an approved death claim. b) Interest only Nonforfeiture values include cash surrender, extended term and reduced paid-up. 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). A) Entire contract period Which of these require an offer, acceptance, and consideration? C) Pay full benefits as stated in the policy There are currently two common types of nonforfeiture benefits being offered with certain insurance policies covering long term care services. Interest Only Eric purchased a cash value life insurance policy six years ago. Interest for the period This year, it will be nothing.Via Ben Fischer of Sports Business Journal, the Amazon Prime series that follows an NFL team through a full season current is in . 90 percent of forfeiture proceeds go to law enforcement, Law enforcement required to report forfeitures to the state auditor on a monthly basis, and the auditor must then make annual reports to the state Legislature. (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). 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. Which of the following statements is (are) true regarding life insurance policyowner dividends? Have a great time ahead. Plot the fitted values on the horizontal axis and the residuals on the vertical axis. C) The insurers obligation to pay a death benefit upon an approved death claim Interest only is a settlement option. A Medicare Supplement policy must provide coverage for pre-existing conditions after the policy has been in force for a) 1 year b) 2 years c) 90 days d) 6 months. Coverage will be adjusted to reflect the insureds true age if a misstatement of age is discovered. B) Policy exclusion It is tax deductible To keep advancing your career, the additional CFI resources below will be useful: Within the finance and banking industry, no one size fits all. 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 provision will pay a portion of the death benefit prior to the insureds death due to a serious illness? In permanent life insurance policies, if you fail to pay the premiums in the grace period, you won't lose your life insurance. What does the guaranteed insurability option allow an insured to do? "What Are Life Insurance Non-Forfeiture Options? automatically add the amount of interest due to the loan balance. D) revoke an absolute assignment. When a misrepresentation on a life insurance policy application is discovered, what action may an insurance company take? Which of these is NOT considered to be a nonforfeiture option in a whole life insurance policy? Inability of the insured to perform more than 2 Activities of Daily Living (ADLs), The Accidental Death and Dismemberment (AD&D) provision in a life insurance policy would pay additional benefits if the insured. What are collateral assignments normally associated with? Thanks for choosing us. If cash has accumulated in the policy, state law forbids companies from keeping it and cancelling 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. 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. C) no beneficiary was ever named suicide. D) The policys cost basic is exempt from taxation, D) The policys cost basic is exempt from taxation. If thats the case, you dont have to worry anymore. A) Grace period 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 The option that provides an additional death benefit for a limited amount of time at the lowest possible cost is called a(n), Accidental Death and Dismemberment rider (AD&D). All of the following are true of Key Employee life insurance EXCEPT a) The death benefit is free from income taxes. An insurer can be protected from adverse selection with which policy provision? D) Life income annuity. Recent Examples on the Web This relatively unknown nonforfeiture option is called a life settlement. M had an annual life insurance premium payment due January 1. Chapter 3.2 - Subjecto.com Ss attained age Chapter 8 Quiz Flashcards | Quizlet When is the face amount of a Whole Life policy paid? 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)? Fixed Period C) Paid-up option \text { Rent Expense } & 229,000 & \\ A double indemnity benefit will be payable to Matts beneficiary if Matt, A) is killed while committing a felony d. Accumulated Depreciation-Equipment. Which of these is an element of a Variable Life policy? If he dies, how will the adjusted death benefit be calculated? A) Cancel the policy Which military service exclusion clause would pay upon his death? \text { Interest Expense } & \underline{~~~~~~~~~~4,500} &\underline{~~~~~~~~~~~~~~~~~~~} \\ Jerry is an insured who understated his age on his life insurance application, paying $12 per $1,000 of insurance instead of $15 per $1,000. This rider is called a(n), A) Guaranteed insurability rider N is a student pilot with a large life insurance policy. Term vs. Consider consulting a financial advisor who can guide you on choosing an option that will best fit your circumstances. A counselor receives a fee for advice, and can maintain a dual license as an agent and counselor. \text { Wages Expense } & 137,000 & \\ L4. Life Insurance Policy Provisions Options and Riders Reduced Premium. S dies 5 years later in 2008 and the insurer pays the beneficiary $10,500. $50,000 minus any outstanding policy loans. If the consumer price index has gone up 4%, how much may Ron increase the face value of the policy? 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? B) Extended term option What does the insuring agreement in a Life insurance contract establish? All of the following are true regarding a decreasing term policy EXCEPT The insured's premiums will be waived until she is 21. B) the right to contest the terms of the policy \textbf{Unadjusted Trial Balance}\\ Which of the following statements is (are) true with respect to life insurance policy loans? Compute SYXS_{Y X}SYX and interpret your findings Compute the MADM A DMAD and interpret your findings. C) Term life policies are the only type of insurance that allows policy loans \text { Supplies } & 4,200 & \\ 609.5315. Unlike conventional loans, policy loans don't necessarily need to be paid back. Bruce is involved in an accident and becomes totally and permanently disabled. Change the beneficiary, if revocable, Modify a provision in the insurance contract. C) resubmit a new life insurance application Life Insurance Policies - Provisions, Options and Riders - 2 C) Entire Contract A) The policys cost basis is taxable 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). C) are limited by the face amount of the policy B) Ike may eventually take out a policy loan g. Income taxes of$55,539 are owed but unrecorded and unpaid. Each takes out a $500,000 life insurance policy on the other, naming himself as primary beneficiary. Cash surrender value b. S would like to use dividends from her life insurance policy to purchase paid-up additions. Taxable C. Nontaxable D. Tax Deductible B. B) Make a premium payment after the due date without any loss of coverage However, when the policy is terminated or the owner surrenders the policy, the death benefit ceases to exist. \text { Unearned Service Revenue } & & 11,200 \\ C) Extended term insurance B) Pay age-corrected benefits Waiver of Premium is available on both permanent and term insurance policies B) Age C) Reduced paid-up insurance The above question All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT, Was part of Insurance MCQs & Answers. b) The key employee has premiums deducted from his salary. B) Waiver of Premium Void the policy only if it is discovered during the Contestable period and proven to be material, All of these Settlement options involve the systematic liquidation of the death proceeds in the event of the insureds death EXCEPT A) Policy Summary Fixed Amount Unit 6 Flashcards by Lauren Pulido | Brainscape All of the following are optional methods of settlement after the insured has died EXCEPT. dividend amount used toward purchase C) Covered hazard A long-term care rider in a life insurance policy pays a daily benefit in the event of which of the following? Mike buys a 10-year renewable term policy. It is taxed as capital gains war. \text { Accounts Receivable } & 15,900 & \\ Which rider provides coverage for a child under a parents life insurance policy? Never tax deductible. C) transferable assignment D) Guaranteed Insurability, The suicide clause of a life insurance policy states that if an insured commits suicide within a stated period from the policys inception, the insurer will only be liable for a return of premiums paid, A) minus indebtedness and with interest 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. C) Reinstatement period . C) Period of time after a policy is issued and before it is delivered to policyowner 4. 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 D) is injured in a skiing accident and dies 18 months later. B) Entire Contract clause A) Long-term care rider \hline \text { Cash } & \$ 3,100 & \\ B) policy and all sales material

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