CHAPTER 5 - INDIVIDUAL LIFE INSURANCE CONTRACT - PROVISIONS AND OPTIONS QUESTIONS
ANSWERED CORRECTLY LATEST 2026
If the policyowner, the insured, and the beneficiary under a life insurance policy are three different
people, who has the ownership rights? - Answers Policyowner.
A policyowner fails to pay the premium due on his whole life policy after the grace period passes, but
the policy remains in force. This is due to what provision? - Answers Automatic premium loan
What provision in an insurance policy extends coverage beyond the premium due date? - Answers
Grace period
All of the following statements concerning dividends are true EXCEPT - Answers Dividend amounts are
guaranteed in the policy.
The paid-up addition option uses the dividend - Answers To purchase a smaller amount of the same
type of insurance as the original policy.
What type of account will most likely be established for a minor? - Answers Trust
If a life insurance policy has an irrevocable beneficiary designation, - Answers The beneficiary can only
be changed with written permission of the beneficiary.
An absolute assignment is a - Answers Transfer of all ownership rights in a policy.
An insured pays an annual premium to his insurer. In return, the insurer promises to pay benefits in
accordance with the terms of the contract. This is called - Answers Consideration
Which of the following is true regarding a single life settlement option? - Answers It provides income
the beneficiary cannot outlive.
The policyowner pays for her life insurance annually. Until now, she has collected a nontaxable
dividend check each year. She has decided that she would rather use the dividends to help pay for her
next premium. What option would allow her to do this? - Answers Reduction of premium
An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the
beneficiaries? - Answers The surviving beneficiary will continue receiving 2/3 of the benefit paid when
both beneficiaries were alive.
ANSWERED CORRECTLY LATEST 2026
If the policyowner, the insured, and the beneficiary under a life insurance policy are three different
people, who has the ownership rights? - Answers Policyowner.
A policyowner fails to pay the premium due on his whole life policy after the grace period passes, but
the policy remains in force. This is due to what provision? - Answers Automatic premium loan
What provision in an insurance policy extends coverage beyond the premium due date? - Answers
Grace period
All of the following statements concerning dividends are true EXCEPT - Answers Dividend amounts are
guaranteed in the policy.
The paid-up addition option uses the dividend - Answers To purchase a smaller amount of the same
type of insurance as the original policy.
What type of account will most likely be established for a minor? - Answers Trust
If a life insurance policy has an irrevocable beneficiary designation, - Answers The beneficiary can only
be changed with written permission of the beneficiary.
An absolute assignment is a - Answers Transfer of all ownership rights in a policy.
An insured pays an annual premium to his insurer. In return, the insurer promises to pay benefits in
accordance with the terms of the contract. This is called - Answers Consideration
Which of the following is true regarding a single life settlement option? - Answers It provides income
the beneficiary cannot outlive.
The policyowner pays for her life insurance annually. Until now, she has collected a nontaxable
dividend check each year. She has decided that she would rather use the dividends to help pay for her
next premium. What option would allow her to do this? - Answers Reduction of premium
An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the
beneficiaries? - Answers The surviving beneficiary will continue receiving 2/3 of the benefit paid when
both beneficiaries were alive.
