Chapter 5.5 : Options
Discipline: Business
Type of Paper: Question-Answer
Academic Level: High school
Paper Format: APA
Pages: 1
Words: 275
Question
Which nonforfeiture option is the "automatic" option?
Select one: a. None b. Extended term option c. Reduced paid-up d. Cash surrender
Select one: a. None b. Extended term option c. Reduced paid-up d. Cash surrender
If
the policyowner cannot be reached, premium payments have ceased, and
the policy's cash value is eliminated, the insurer will automatically
use the extended term option.
The correct answer is: Extended term option
The correct answer is: Extended term option
What nonforfeiture option permits the policyowner to use the cash values to purchase paid-up term life insurance coverage?
Select one: a. None b. Cash surrender value c. Extended term d. Reduced paid-up insurance
Select one: a. None b. Cash surrender value c. Extended term d. Reduced paid-up insurance
The extended term option permits the policyowner to use the policy's cash values to buy paid-up term insurance.
The correct answer is: Extended term
The correct answer is: Extended term
What
nonforfeiture option allows the policyowner to purchase paid-up whole
life coverage at a reduced face amount based on the policy's existing
cash value?
Select one: a. Extended term b. Cash surrender value c. Reduced paid-up insurance d. None
Select one: a. Extended term b. Cash surrender value c. Reduced paid-up insurance d. None
The
reduced paid-up insurance option allows the policyowner to purchase
paid-up whole life coverage at a reduced face amount based on the amount
of the policy cash value.
The correct answer is: Reduced paid-up insurance
The correct answer is: Reduced paid-up insurance
Eddie wants to use a nonforfeiture option. Which of the following may Eddie not use?
Select one: a. Cash surrender value b. Accumulation at interest c. Extended term d. None of the above
Select one: a. Cash surrender value b. Accumulation at interest c. Extended term d. None of the above
Accumulation at interest is a dividend option.
The correct answer is: Accumulation at interest
The correct answer is: Accumulation at interest
This dividend option provides additional permanent coverage:
Select one: a. Paid-up additions b. One-year term c. Accumulate at interest d. Cash payment
Select one: a. Paid-up additions b. One-year term c. Accumulate at interest d. Cash payment
The paid-up additions dividend option uses the dividend as a single premium to purchase paid-up whole life coverage.
The correct answer is: Paid-up additions
The correct answer is: Paid-up additions
Which of the following nonforfeiture options does not allow the insured to reinstate the policy:
Select one: a. None b. Extended term option c. Reduced paid-up d. Cash surrender
Select one: a. None b. Extended term option c. Reduced paid-up d. Cash surrender
The
extended term and reduced paid-up nonforfeiture options allow the
policyowner to reinstate the original policy because coverage is still
in effect. However, the cash surrender option does not allow the policy
to be reinstated because the policy has been surrendered for its cash
value, and no coverage remains.
The correct answer is: Cash surrender
The correct answer is: Cash surrender
Which life insurance dividend option does not increase a policy's cash value?
Select one: a. Cash payment b. Accumulate at Interest c. Paid-up insurance d. Paid-up additions
Select one: a. Cash payment b. Accumulate at Interest c. Paid-up insurance d. Paid-up additions
With
the cash payment dividend option, the policyholder is sent a check for
the amount of the dividend, which does not increase the policy's cash
value.
The correct answer is: Cash payment
The correct answer is: Cash payment
Rick
is planning on getting married next month. He currently has a $100,000
whole life participating policy. Because he is planning a family, he
wants to increase his life insurance while keeping his costs down. Which
of the following options would best suit his needs?
Select one: a. Rick could use his dividends to purchase one-year term insurance. b. Dividends could be applied against Rick's future premium payments. c. He could allow the dividends to accumulate at interest. d. Rick could use the dividends to purchase paid-up additions.
Select one: a. Rick could use his dividends to purchase one-year term insurance. b. Dividends could be applied against Rick's future premium payments. c. He could allow the dividends to accumulate at interest. d. Rick could use the dividends to purchase paid-up additions.
Rick
can use his dividends to purchase paid-up additions, without adding
significantly to his costs. This option fulfills his need for increased
coverage in the coming years as he starts his family.
The correct answer is: Rick could use the dividends to purchase paid-up additions.
The correct answer is: Rick could use the dividends to purchase paid-up additions.
Which of the following is a guarantee that is required by law to be a part of life insurance polices that build cash value?
Select one: a. Insuring clause b. Settlement option c. Nonforfeiture option d. Dividend option
Select one: a. Insuring clause b. Settlement option c. Nonforfeiture option d. Dividend option
Nonforfeiture
options/values are guarantees that are required by law to be part of
life insurance policies that build cash value
The correct answer is: Nonforfeiture option
The correct answer is: Nonforfeiture option
Which of the following is not a dividend option?
Select one: a. Reduction of premium payments b. Paid-up additions c. Reduced paid-up insurance d. Cash payments
Select one: a. Reduction of premium payments b. Paid-up additions c. Reduced paid-up insurance d. Cash payments
Reduced paid-up insurance is a nonforfeiture option.
The correct answer is: Reduced paid-up insurance
The correct answer is: Reduced paid-up insurance