Life Insurance Policy Provisions and Riders Flashcards
6 cards from real Life and Health California Exam practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Life Insurance Policy Provisions and Riders flashcards as text
Which settlement option guarantees that the policy proceeds will be paid over a fixed number of years regardless of whether the beneficiary is alive?
Answer: Fixed period option
The fixed period option pays the proceeds in equal installments over a specified number of years; if the beneficiary dies before payments end, the remaining installments go to the contingent payee.
The 'life income with period certain' settlement option guarantees income:
Answer: For the life of the beneficiary or for a minimum guaranteed period, whichever is longer
Life income with period certain pays benefits for life but guarantees a minimum number of payments; if the beneficiary dies within the certain period, remaining payments go to the secondary beneficiary.
Under a life insurance policy's 'entire contract' provision, which documents constitute the complete contract between the insurer and policyowner?
Answer: The policy and any attached riders or endorsements, and a copy of the application
The entire contract clause specifies that the policy, attached riders/endorsements, and a copy of the application are the complete contract—nothing outside these documents is binding.
A 'return of premium' rider on a life insurance policy:
Answer: Increases the death benefit by the total amount of premiums paid if the insured dies before the end of the term
A return of premium (ROP) rider pays an additional death benefit equal to the total premiums paid if the insured dies while the rider is in force, effectively returning all premiums to the beneficiary.
When an irrevocable beneficiary designation is made, the policyowner:
Answer: Cannot change the beneficiary or assign the policy without the beneficiary's consent
An irrevocable beneficiary has a vested interest in the policy, so the policyowner cannot change the beneficiary designation, assign the policy, or take loans without the beneficiary's written consent.
The 'suicide clause' in a life insurance policy typically states that if the insured commits suicide within 2 years of policy issuance:
Answer: The insurer returns only the premiums paid, with no additional death benefit
The suicide clause limits the insurer's liability to a return of premiums if suicide occurs within the exclusion period (typically 1-2 years), after which the full death benefit is payable.