Life & Health Insurance Exam -Questions & Correct Answers

Decreasing Term {Ans: death benefit decreases each year over duration of the policy term; typically used when the amount of needed protection is time sensitive, or decreases over time}Collateral Assignment {Ans: transfer of partial rights to another person; usually done to secure a loan or some other transaction; partial and temporary assignment of some of the policy rights; once debt/loan repaid, assigned rights returned to the policy owner}Increasing Term {Ans: death benefit increases each year over duration of the policy term (usually by specific amount or percentage of original amount); often used by insurance companies to fund certain riders that provide a refund of premiums of a gradual increase in total coverage, such as the cost of living or return of premium riders}Accidental Death Rider {Ans: pays some multiple of the face amount if the death is the result of an accident as defined in the policy; death must usually occur within 90 days of such an accident}Fixed Life Insurance and Annuities {Ans: contracts that offer guaranteed minimum of fixed benefits that are stated in the contract}Spendthrift Clause {Ans: protects beneficiaries from the claims of their creditors; designed to protect life insurance policy proceeds