all of the following are nonforfeiture options except

\text { Rent Expense } & 229,000 & \\ C) A prorated death benefit based on the amount of insurance the insureds premiums would have been if purchased at the correct age reduced paid-up insurance. The interest credited under this option is TAXABLE, whether or not the policyowner receives it. Evidence of insurability is not required when the option is exercised Elaine was diagnosed with a terminal illness. When is the face amount of a Whole Life policy paid? b. Have a great time ahead. D) Payor benefit. Tax deductible. D) Automatic premium loan provision, Matt is applying for life insurance and requests a double indemnity rider. C) Entire Contract C) The entire cash value is taxable C) dies instantly from a car accident C) Extended term insurance How much will the insurer pay the beneficiary? His insurance policy continues in force without payment of further premiums. Which military service exclusion clause would pay upon his death? Evidence of insurability is required when the option is exercised B) The policy will be voided with no death benefits paid 40% taxable, similar to a capital gain B. For traditional whole-life policies, the owner decides which of four ways (see below) they would like to access the policys cash value. 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. B) One year term It stipulates that the policyholder will receive a partial or full refund of premiums paid if the policy lapses after a defined period due to missed premium payments. Life insurance is a contract in which an insurer, in exchange for a premium, guarantees payment to an insureds beneficiaries when the insured dies. Kurt is an active duty serviceman who was recently killed in an accident while home on leave. Extended-term insurance allows a policyholderto stop paying the premiums, but not forfeit the equity of theirpolicy. 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. Ike purchases a whole life policy. \text { Wages Expense } & 137,000 & \\ In personum actions are against the owner of property, whereas in rem actions are taken . One type of life insurance is a nonparticipating whole life policy in which cash values are based on the insurer's present mortality, investment, and expense experience. D) Certificate of Authority, All of these are valid policy dividend options for a life insurance policyowner EXCEPT, A) cash outlay to the policyowner Pay face amount minus the past due premium. Investopedia requires writers to use primary sources to support their work. A) Optional rider However, during the early years of awhole life insurance policy, the savings portion brings little return compared to thepremiumspaid. Depending on the age of the policy, the cash surrender value could be less than theactual cash value. For some companies, this option may be automatic when surrendering a whole life insurance policy. 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. What are collateral assignments normally associated with? What is the Suicide provision designed to do? B) Probation period B) payor rider While investigating the claim, the insurer discovered material misrepresentations made by P during the application process. D) A return of excess premium subject to capital gains tax, C) A return of excess premium and not taxable, All of the following riders can increase the death benefit amount EXCEPT, A) Cost of Living Taxable C. Nontaxable D. Tax Deductible B. A physical inventory shows that$650 of office supplies is on hand. You should now have gotten the answer to your question All of the following are nonforfeiture options, EXCEPT:, which was part of Insurance MCQs & Answers. If an insured dies because of an accident, which type of life insurance rider will provide additional coverage? Her doctor said that her only chance of survival is an experimental treatment. B) Grace period D) The policys cost basic is exempt from taxation, D) The policys cost basic is exempt from taxation. \text { Accounts Receivable } & 15,900 & \\ reduced paid-up insurance cash value. The above question All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT, Was part of Insurance MCQs & Answers. 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). J let her life insurance policy lapse 8 months ago due to nonpayment. C) aviation B) It allows for policy loans to be advanced to the insured in the event of unemployment Let us have a look at your work and suggest how to improve it! The correct answer is "Automatic Premium Loan Option". Coverage can be added at specific events such as marriage or having a child B) nonforfeiture option A) Waiver of premium Refer to the earlier problem. In 2010, P takes up scuba diving and dies in a scuba-related accident in 2011. C) Allows for a full refund after policy delivery o paid - up additions extended term insurance . Interest only is a settlement option. Depending on the age of the policy, the cash surrender value could be less than theactual cash value. d) The key employee is the insured. When a policy is in force for a longer duration, the better the cash values and the nonforfeiture values. B) add-on ? Life Income, Which of the following Dividend options results in taxable income to the policyowner? Which statement is true regarding policy dividends? 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? Interest for the period After surrendering a whole-life insurance policy, the death benefit on that policy no longer exists. Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value. The following situations involve some form of discrimination. Accumulation at Interest Which of the following protects a policyowner from a misrepresentation caused by an innocent mistake? D) accidental death. However, any money you take out will be deducted from the death benefit that goes to your beneficiaries. A) Policy Summary Each brother purchases a life policy that has a $750 annual premium. C) rider In some instances, insurers provide an extended-term option as an automatic option in the event that the original coverage lapses due to missed premium payments. E and F are business partners. Your email address will not be published. During the claim process, the insurer discovers that L had understated her age on the application. A person may have a vested interest in property to be forfeit in two ways: In personum jurisdiction and in rem jurisdiction. One life insurance policy provision permits the policyholder to pledge certain rights in the life insurance policy to secure a loan. A) No death benefit is owed because of the misstatement of age Which of the following areas do errors commonly occur on applications and for which the incontestable clause does NOT apply? D) hazardous occupations. B) Period of time it takes for a policys underwriting to compete We also reference original research from other reputable publishers where appropriate. B) accumulate without interest All of the following are Nonforfeiture options EXCEPT a) Reduced paid-up b) Interest only c) Cash surrender d) Extended term. a) The company b) The insured c) The agent d) The counselor. \text { Retained Earnings, 12/31/2018 } & & 37,000 \\ Cash Surrender, A Return of Premium life insurance policy is. reduction of premium Which situation accurately describes a reduced paid-up nonforfeiture option? C) Rider Which of these are NOT an example of a Nonforfeiture option? B) Reduced paid-up insurance A) Entire contract provision Fixed Period 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 Which of these Nonforfeiture Options continue a build-up of cash value? C) suicide d) 6 months Pre-existing conditions must be covered after a policy has been in force for 6 months. Which of the questions would you be unlikely to ask when interviewing a real estate agent? A) Policy has a decreased face amount B) provide evidence of insurability, pay past due premiums c) The agent An agent represents the company. With maintenance cost as the dependent variable and age, odometer miles, miles since last maintenance, and engine type as the independent variables, create a regression equation using statistical software by setting variable to 1. a) A client with amyotrophic lateral sclerosis (ALS) tells the nurse, "Sometimes I feel so frustrated. Choosing the nonforfeiture extended term option allows the policy owner to use the cash value to purchase a term insurance policy with a death benefit equal to that of the original whole-life policy. He forgot to pay the premium that was due last week. Thanks for choosing us. B) Paid-up additions c. What is your commission? B) $800 D) Conditions. A) Declarations 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. 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. 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. Set the qualitative variable to 0 if the engine type is a diesel. 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. Which of the following is the process of getting oxygen from the environment to the tissues of the body? C) Nonforfeiture provision All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT. Reduced Paid-Up AILife.com. D) The amount of premiums paid will be returned with interest, C) The death benefit paid will be what the premium would be purchased at the correct age. B) Exclusion When an accidental death benefit is added to a whole life policy, how does this affect the policys cash value? 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. Which of these describe a participating life insurance policy? Which life insurance rider typically appears on a Juvenile life insurance policy? 9 Q What kind of policy does NOT typically require proof of insurability? Mississippi. A policy loan is issued by an insurance company and uses the cash value of a life insurance policy as collateral. Of the following dividend options, which of these is taxable? C) Accelerated rider 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. Insurance companies can send delinquent interest accounts to a collection agency A young, married teacher has two children and owns a Whole Life policy. b. Policy loans may still be made Ron joins the PPO provided by his employer. g. Salaries and Wages Expense A) The agents obligation to provide the proper amount of coverage Five years later, T commits suicide. Term vs. D) Mandatory provision, In order to activate the reinstatement clause of a lapsed life insurance policy, the insured MUST, A) remit all past-due premiums within the grace period A) Insured becomes unemployed Which of the following statements is (are) true with respect to life insurance policy loans? A waiver of premium rider allows an insured to waive premium payments if the insured is Life Insurance Policies - Provisions, Options, Fundamentals of Financial Management, Concise Edition, Ch 3 Section 3: L'chec scolaire: les lves. What is an insurer required to do when faced with an error made under the Misstatement of Age provision? Set the qualitative parameters if the engine type is gasoline. The policy owner does not forfeit the previous payments and is entitled to receive the policys cash value. Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. All of the following are dividend options EXCEPT: Fixed-period installments. Required fields are marked *, All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT. 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. C) take out a policy loan D) supplement. 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 The full face amount is available as an accelerated benefit 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. Forfeiture is broadly defined as the loss of property for failing to obey the law, and that property is generally lost to the state. C) the source of funding for administration fees c. Inventory. Which nonforfeiture option has the highest amount of insurance protection? Claims are denied under the Suicide clause of the policy, Which of these statements about a Guaranteed Insurability Option rider is NOT TRUE? A counselor receives a fee for advice, and can maintain a dual license as an agent and counselor. This rider is called a(n), A) Guaranteed insurability rider 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 C) suicide a) Both irrevocable and Revocable. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. \text { Totals } & \underline{\underline{\$ 1,089,100}} & \underline{\underline{\$ 1,089,100}} In what part of an insurance policy are policy benefits found? C) completely and permanently disabled D) The policys cash values steadily decrease after 20 years, B) The policy may be paid up early by using policy dividends, A guaranteed issue insurance policy has no, A) initial premium requirement Their purpose is to protect the insured's accumulated cash values in case the Whole Life or Endowment policy lapses. a) Modified life b) Variable life c) Ordinary life d) Graded premium whole life. D) revoke an absolute assignment. The interest earned on policy dividends is A. Compute SYXS_{Y X}SYX and interpret your findings Compute the MADM A DMAD and interpret your findings. Work with our consultant to learn what to alter. Explain your reasons. The automatic premium loan provision is designed to, All of these statements concerning Settlement Options are true EXCEPT Which nonforfeiture option has the highest amount of insurance protection? Which of the following statements is (are) true regarding life insurance policyowner dividends? B) absolute assignment Standard life insurance and long-term care insurance may have nonforfeiture clauses. Who does the sub-agent represent? B) the policy would be payable only after the beneficiary makes past due premium payment If the consumer price index has gone up 4%, how much may Ron increase the face value of the policy? C) One-year term D) Waiver of premium, An endorsement found in an insurance plan which modifies the provisions of the policy is called a(n), A) attachment C) Paid-up option A) Insuring clause Which of the following statements about accumulated interest earned on dividends from an insurance policy is TRUE? 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. D) Monthly income payments. How are policyowner dividends treated in regards to income tax? Never tax deductible. 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. B) Application D) Life income annuity. Before issuing payment to the policy owner, outstanding loan amounts are satisfied with the cash value. Life insurance policyholders can select one of four nonforfeiture benefit options: the cash surrender value, extended term insurance, loan value, and paid-up insurance. Annuities pay regular payments as outlined in the contract. Cash If cash has accumulated in the policy, state law forbids companies from keeping it and cancelling the policy. D) Cash surrender. 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. \text { Prepaid Rent } & 9,500 & \\ 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. Which of these life insurance riders allows the applicant to have excess coverage? Some states require a provision limiting the time parameters in which a claimant may seek recovery from an insurer under a policy. Which of these is considered to be a Living Benefit option in a life insurance policy? Why would you not want to prepare financial statements C) The death benefit paid will be what the premium would be purchased at the correct age

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