Exam FX Chapter 4: Life Insurance Policy Provisions, Riders and Options questions with correct answers

Activities of daily living (ADLs) CORRECT ANSWER a person's essential activities that include bathing, dressing, eating, transferring, toileting, continence Assignment CORRECT ANSWER transfer of rights of policy ownership Contingent beneficiary CORRECT ANSWER a beneficiary who has second claim to the policy proceeds after the death of the insured NAIC CORRECT ANSWER National Association of Insurance Commissioners, an organization composed of insurance commissioners from all 50 states, D.C and the 4 US territories, formed to resolve insurance regulatory issues Primary beneficiary CORRECT ANSWER a beneficiary who has the first claim to the policy proceeds after the death of the insured Principal amount CORRECT ANSWER the face value of the policy; the original amount invested before the earnings. Trust CORRECT ANSWER an arrangement in which funds or property are held by a person or corporation for the benefits of another person (trust beneficiary) Standard Provisions and Exclusions CORRECT ANSWER (no standard policy form in life insurance) However, standard policy provisions adopted by NAIC create uniformity among life insurance policies