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43 Cards in this Set
- Front
- Back
A ___ Option dictates a mode of payment to a beneficiary (e.g. Fixed Amount, Fixed Period, Life Income, etc.) The owner may choose Settlement Option for a beneficiary that may not be changed by the beneficiary. |
Settlement |
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___ charges provide a means for the insurer to recapture their upfront expenses involved in issuing the policy. |
Surrender |
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___, payments are made for the lifetime of the recipient. Upon death, if a recipient has not received an amount equal to the total death benefit, the balance is refunded to the beneficiary, either in a lump sum (cash refund), or in installments (installment refund). |
Life Refund |
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*Z elects the life refund settlement option for a $250,000 death benefit. Z lives long enough to recover $150,000 of the $250,000 death benefit. How much does his beneficiary receive? |
$100,000 |
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___ represent a 'refund of unused premiums' when mutual insurers have a surplus (profit). ___ are not guaranteed. |
Dividends |
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___ accumulates as the policyowner pays premium over the years. |
Cash value |
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The ___ value must be stated in the contract if the owner wishes to cancel the policy, and Extended Term is a Nonforfeiture option that must be offered. |
cash surrender |
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___ Term is a Nonforfeiture option that must be offered. |
Extended |
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Since there were no other beneficiaries named, the death benefit would default to the ___. The probate court would distribute the proceeds according to law. |
insured's estate |
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The entire contract consists of the |
policy, riders, amendments, and a copy of the application. Nothing can be incorporated by reference. |
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One-Year Term and Paid-Up Additions are dividend options, not ___ |
nonforfeiture options |
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Dividends are declared under ___ policies, are paid as declared, and are not guaranteed. The dividends are a return of excess premiums paid. |
participating |
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receive dividends if the policy is which of the following? |
Participating |
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The ___ gives the insurer the right to borrow sufficient funds from the cash value to prevent a policy lapse. |
Automatic Premium Loan Provision (APL) |
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The ____________ provision prevents a Whole Life Policy from lapsing, as long as there is adequate cash value, if the insured/policyowner forgets to pay the premium by the end of the grace period. |
Automatic Premium Loan |
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Some traditional whole life policies offer a(n) __________ feature to keep the policy in force if there are sufficient cash values to do so. |
Automatic premium loan |
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Nonforfeiture values go into effect after |
a policy lapses. |
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The automatic premium loan will keep a policy from lapsing. It is not a nonforfeiture values because Nonforfeiture values go into effect after __ |
a policy lapses. |
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Settlement Options ___ taxed to the beneficiary |
Only the interest would be not the principal |
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___ are used when the owner wants to convert a lump sum death benefit to an income stream for the beneficiary |
Settlement Options |
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A partial withdrawal is considered a |
partial surrender of the policy. |
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The two types of assignment are |
Collateral (temporary), and Absolute (permanent). |
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As the policyowner, Sylvia is free to change a revocable beneficiary at any time. She may also name a (best friend) new beneficiary if an irrevocable beneficiary dies before the insured. A beneficiary is not required to have |
an insurable interest in the insured. |
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The ___ automatically becomes effective at the end of the grace period to prevent the policy from lapsing. There is no charge for having this provision in a cash value policy. |
Automatic Premium Loan provision |
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Automatic Premium Loan Provision (APL)? |
Treated like any other policy loanOnly available on cash value policies. No charge for having this provision.Provision automatically becomes effective at the end of the grace period to prevent the policy from lapsing. |
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Contractual provisions explain |
what the contract consists of what duties & responsibilities the parties to the contract have, how the policy works & basically spell out the agreement between the policyowner & the insurance company |
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The ___ clause is the insurance company's promise to pay the policy's death benefit to the named beneficiary, after receiving due proof of death of the insured, as long as the policy is in force. |
insuring |
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The common disaster clause assumes the __ if both are killed in the same accident |
primary beneficiary died before the insured |
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Extended term is a |
nonforfeiture option |
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A ____ is one which would have caused the insurer to not issue the policy had it been known. |
material misstatement |
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Fixed Amount Settlement Option. |
The owner specifies the amount of each periodic payment and the insurer pays that amount until the funds plus interest are depleted |
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Only ___ can provide for missed premium payments to be paid with the policy's cash value through an automatic premium loan. |
cash value policies |
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An insured forgets to pay his insurance premium. Instead of the policy lapsing, the premium is paid by the company. This would suggest that a __________ policy was purchased. |
Whole Life |
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Policies on a ___ platform allow for partial withdrawals. |
universal life |
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No assignment of the policy will be binding on the insurer unless it is ____ The insurer is not responsible for determining the validity of the assignment. |
in writing and received at the insurer's home office |
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___ not considered material to the policy issuance. |
Age and/or gender are |
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Failing to repay a loan or loan interest will not void a policy until |
the total amount due becomes greater than the policy's cash value. |
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The __ clause states what each party exchanges in the contract. |
consideration |
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Frank has a life insurance policy in which he chooses to have the dividends increase the death benefit. Which Dividend Option did he select? |
Paid-Up Additions |
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___ purchases single premium additional permanent benefits at the insured's attained age. The additional insurance is added to the face amount & it generates cash values & dividends as if the paid-up additional benefit was part of the original policy. |
Paid-Up Additions |
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Upon non-payment of premium due, the extended term option kicks in automatically and is paid for by the ___ of the policy. The policy has nonforfeiture values which are available to the policyowner. |
cash values |
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The ____ Option uses the present cash value of the policy, upon its lapse, to automatically buy a single premium term policy of the same face amount for a specified number of years and days as listed in the policy's nonforfeiture table. |
Extended Term |
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Under the law, an ___ is a transfer of a right to another person or entity of rights by the owner of such rights. |
assignment |