Exam Fx Chapter 4: Life Insurance Policy Provisions, Riders And Options With 69 Questions And Answers

Accumulation at interest {Ans: the insurance company keeps the dividend in an account where it accumulates interest. The interest on the dividends is taxable.}life refund {Ans: comes in either a cash refund form or an installment refund form. Both options guarantee the total annuity fund will be paid out to the annuitant or to the beneficiary. Cash refund option- if the annuitant dies before the annuity fund is depleted, a lump sum settlement of the remainder would be made to the beneficiary. Installment refund option- the beneficiary would receive the remaining funds in the form of continued annuity payments}Reinstatement {Ans: allows a lapsed policy to be put back into force. The max time limit is usually 3 years after the policy has lapsed. If the policyowner elects to reinstate the policy, he/she will have to provide evidence of insurability.}Guaranteed insurability rider {Ans: allows the insured to purchase additional coverage at specified future dates (usually every 3 years), or events (marriage or birth of a child), without evidence of insurability, for an additional premium.}Insurance companies may defer a policy loan request for up to ___ months {Ans: 6}One year term option {Ans: the insurance company