NY License Exam - Life Insurance Policy Options and Riders
Study Test.
1. options enable policyowners to apply the
provi- sions of a policy to suit their
needs. Selec- tion of which does not
increase the premi- um the
policyowner pays.
2. rider An attachment to an insurance policy
that
changes the benefits either by
adding new benefits or by excluding
certain benefits from coverage.
Almost always involve ad- ditional
premiums.
3. Most common policy options and 1. nonforfeiture options
riders in- clude:
2. policy loan and withdrawal
provisions
3. dividend options
4. settlement options
5. disability riders
6. riders covering additional
insureds
7. accelerated living benefit
provi- sions/riders
8. riders attecting the death
benefit amount
4. nonforfeiture options A guarantee given to the policyowner
that prevents the loss of the cash
value. This option applies when the
policy is surren- dered or lapses.
The purpose of the option is to
identify how the cash value will be
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, NY License Exam - Life Insurance Policy Options and Riders
Study Test.
used.
5. Life insurance policies commonly 1. cash surrender option
contain three nonforfeiture
2. extended term insurance option
options:
3. reduced paid-up insurance
option
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25
, NY License Exam - Life Insurance Policy Options and Riders
Study Test.
6. cash surrender option Under this option, the policy is
surren- dered and the insurer simply
pays the cash value to the
policyowner in a limp sum.
At that point, the policy is canceled. The insurer's responsibility under the terms of the contract end.
Surrendered policies cannot be
reinstated.
7. Most states allow insurers to delay six months
paying the cash surrender value
for up to
8. extended term insurance option An option under which the insurer
applies
that cash value of a lapsed policy to
buy a term insurance policy. The term
insurance is bought in an amount
equal to the face amount of the
lapsed policy. The term cov- erage
lasts for whatever period the cash
value buys.
9. participating policy A class of life (or health) insurance
policy in which the owner is paid a
dividend out of the insurance
company's earnings that are available
for distribution (the divisible
surplus).
10. Sometimes an owner of a lapsed policy that extended term
was issued on a standard basis fails to
elect one of the nonforfeiture
options. Insurers typically apply the
insurance option
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25
Study Test.
1. options enable policyowners to apply the
provi- sions of a policy to suit their
needs. Selec- tion of which does not
increase the premi- um the
policyowner pays.
2. rider An attachment to an insurance policy
that
changes the benefits either by
adding new benefits or by excluding
certain benefits from coverage.
Almost always involve ad- ditional
premiums.
3. Most common policy options and 1. nonforfeiture options
riders in- clude:
2. policy loan and withdrawal
provisions
3. dividend options
4. settlement options
5. disability riders
6. riders covering additional
insureds
7. accelerated living benefit
provi- sions/riders
8. riders attecting the death
benefit amount
4. nonforfeiture options A guarantee given to the policyowner
that prevents the loss of the cash
value. This option applies when the
policy is surren- dered or lapses.
The purpose of the option is to
identify how the cash value will be
1/
25
, NY License Exam - Life Insurance Policy Options and Riders
Study Test.
used.
5. Life insurance policies commonly 1. cash surrender option
contain three nonforfeiture
2. extended term insurance option
options:
3. reduced paid-up insurance
option
2/
25
, NY License Exam - Life Insurance Policy Options and Riders
Study Test.
6. cash surrender option Under this option, the policy is
surren- dered and the insurer simply
pays the cash value to the
policyowner in a limp sum.
At that point, the policy is canceled. The insurer's responsibility under the terms of the contract end.
Surrendered policies cannot be
reinstated.
7. Most states allow insurers to delay six months
paying the cash surrender value
for up to
8. extended term insurance option An option under which the insurer
applies
that cash value of a lapsed policy to
buy a term insurance policy. The term
insurance is bought in an amount
equal to the face amount of the
lapsed policy. The term cov- erage
lasts for whatever period the cash
value buys.
9. participating policy A class of life (or health) insurance
policy in which the owner is paid a
dividend out of the insurance
company's earnings that are available
for distribution (the divisible
surplus).
10. Sometimes an owner of a lapsed policy that extended term
was issued on a standard basis fails to
elect one of the nonforfeiture
options. Insurers typically apply the
insurance option
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25
