LOMA 281 MODULE 3 LATEST
Which condition usually is necessary for reinstatement?
- The policyowner MUST have surrendered policy.
- The policyowner MUST NOT have surrendered policy.
- The policyowner MUST NOT have a policy loan outstanding. - ANSWERS-B.
To reinstate a policy, the original policy usually cannot have been surrendered and
any outstanding policy loans must be repaid or reinstated with the policy. Any
other requirements?
a. Yes, the beneficiary of the reinstated policy must be the same as original policy.
b. Yes, the insured must provide evidence of insurability.
c. Yes, the policyowner's home address must be the same as before.
d. No, that's all. - ANSWERS-B.
policy owner must - ANSWERS-Complete the reinstatement application
New contestability period based
only on information in reinstatement
Provide new evidence of insurability
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, LOMA 281 MODULE 3 LATEST
Once a policyowner completes the reinstatement application and provides new
evidence of insurability, what else is needed to complete the policy's
reinstatement?
a. the policy owner has to pay all missed premiums
b. the beneficiary has to agree in writing to reinstatement - ANSWERS-A.
Fixed-premium policy - ANSWERS-Policyowner must pay all missed premiums
plus interest
flexible premium policy - ANSWERS-Policyowner must pay the mortality and
expense charges for a stated amount of time
policy reserves - ANSWERS-Policy reserves are amounts of money that an insurer
projects it will need to pay its future obligations to customers.
Insurance laws require insurers to establish policy reserves so that they'll be able to
pay policy benefits when the benefits come due.
policy reinstatement advantages - ANSWERS-- Premium rate is based on the
insured's age at original policy's purchase date
- Original policy's cash value is reinstated
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, LOMA 281 MODULE 3 LATEST
- Original policy may contain more liberal provisions than do insurer's current
policies. Example: The interest rate for a policy loan may be lower under the
original policy than for the new policy.
Marla Ross is the policyowner-insured of a $50,000 term life policy. The policy's
annual renewal premium is due on May 1. The policy contains a 31-day grace
period provision.
If Marla dies on May 15 without having paid the renewal premium due, the
insurance company will deduct the amount of the unpaid renewal premium from
the policy's proceeds.
a. true
b. false - ANSWERS-A. - Because Marla's policy is still in the grace period, the
insurance coverage is still in force and the insurer is liable for the policy's full
benefit less the amount of the unpaid premium.
Marla Ross's sister Janine is the policyowner-insured of a universal life policy.
Janine has not made a premium payment in four years; the insurer has used the
policy's cash value to pay the monthly mortality and expense (M&E) charges. On
June 1, the cash value of Janine's policy is zero. The grace period for Janine's
policy begins on that date.
Beginning on June 1, Janine will have how many days to make a premium
payment to cover the M&E charges and keep the policy from lapsing?
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, LOMA 281 MODULE 3 LATEST
a. 15 days
b. 30 or 31 days
c. 61 or 62 days - ANSWERS-B. - The grace period for a universal life insurance
policy will last for 61 or 62 days, beginning on the date on which the cash value is
insufficient to cover the M&E charge. However, on the date that the cash value is
zero, the grace period will continue for 30 or 31 days after that date.
Marla Ross's sister Janine is the policyowner-insured of a universal life policy.
Janine has not made a premium payment in four years; the insurer has used the
policy's cash value to pay the monthly mortality and expense (M&E) charges. On
June 1, the cash value of Janine's policy is zero. The grace period for Janine's
policy begins on that date.
If Janine from the previous example dies during the grace period without having
made a payment, the insurer will deduct the amount of overdue M&E risk charges
from the policy proceeds.
a. true
b. false - ANSWERS-A. Because Janine's policy is still in the grace period, the
insurance coverage is still in force. Therefore, the insurer will pay the policy
proceeds but will first deduct the amount of overdue M&E risk charges.
Select each true statement about the reinstatement provision. (Choose all that
apply)
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Which condition usually is necessary for reinstatement?
- The policyowner MUST have surrendered policy.
- The policyowner MUST NOT have surrendered policy.
- The policyowner MUST NOT have a policy loan outstanding. - ANSWERS-B.
To reinstate a policy, the original policy usually cannot have been surrendered and
any outstanding policy loans must be repaid or reinstated with the policy. Any
other requirements?
a. Yes, the beneficiary of the reinstated policy must be the same as original policy.
b. Yes, the insured must provide evidence of insurability.
c. Yes, the policyowner's home address must be the same as before.
d. No, that's all. - ANSWERS-B.
policy owner must - ANSWERS-Complete the reinstatement application
New contestability period based
only on information in reinstatement
Provide new evidence of insurability
END OF
PAGE
1
, LOMA 281 MODULE 3 LATEST
Once a policyowner completes the reinstatement application and provides new
evidence of insurability, what else is needed to complete the policy's
reinstatement?
a. the policy owner has to pay all missed premiums
b. the beneficiary has to agree in writing to reinstatement - ANSWERS-A.
Fixed-premium policy - ANSWERS-Policyowner must pay all missed premiums
plus interest
flexible premium policy - ANSWERS-Policyowner must pay the mortality and
expense charges for a stated amount of time
policy reserves - ANSWERS-Policy reserves are amounts of money that an insurer
projects it will need to pay its future obligations to customers.
Insurance laws require insurers to establish policy reserves so that they'll be able to
pay policy benefits when the benefits come due.
policy reinstatement advantages - ANSWERS-- Premium rate is based on the
insured's age at original policy's purchase date
- Original policy's cash value is reinstated
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PAGE
2
, LOMA 281 MODULE 3 LATEST
- Original policy may contain more liberal provisions than do insurer's current
policies. Example: The interest rate for a policy loan may be lower under the
original policy than for the new policy.
Marla Ross is the policyowner-insured of a $50,000 term life policy. The policy's
annual renewal premium is due on May 1. The policy contains a 31-day grace
period provision.
If Marla dies on May 15 without having paid the renewal premium due, the
insurance company will deduct the amount of the unpaid renewal premium from
the policy's proceeds.
a. true
b. false - ANSWERS-A. - Because Marla's policy is still in the grace period, the
insurance coverage is still in force and the insurer is liable for the policy's full
benefit less the amount of the unpaid premium.
Marla Ross's sister Janine is the policyowner-insured of a universal life policy.
Janine has not made a premium payment in four years; the insurer has used the
policy's cash value to pay the monthly mortality and expense (M&E) charges. On
June 1, the cash value of Janine's policy is zero. The grace period for Janine's
policy begins on that date.
Beginning on June 1, Janine will have how many days to make a premium
payment to cover the M&E charges and keep the policy from lapsing?
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, LOMA 281 MODULE 3 LATEST
a. 15 days
b. 30 or 31 days
c. 61 or 62 days - ANSWERS-B. - The grace period for a universal life insurance
policy will last for 61 or 62 days, beginning on the date on which the cash value is
insufficient to cover the M&E charge. However, on the date that the cash value is
zero, the grace period will continue for 30 or 31 days after that date.
Marla Ross's sister Janine is the policyowner-insured of a universal life policy.
Janine has not made a premium payment in four years; the insurer has used the
policy's cash value to pay the monthly mortality and expense (M&E) charges. On
June 1, the cash value of Janine's policy is zero. The grace period for Janine's
policy begins on that date.
If Janine from the previous example dies during the grace period without having
made a payment, the insurer will deduct the amount of overdue M&E risk charges
from the policy proceeds.
a. true
b. false - ANSWERS-A. Because Janine's policy is still in the grace period, the
insurance coverage is still in force. Therefore, the insurer will pay the policy
proceeds but will first deduct the amount of overdue M&E risk charges.
Select each true statement about the reinstatement provision. (Choose all that
apply)
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PAGE
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