What time period allows an insureds life insurance policy to remain in force even if the premium was not paid on the due date? Beneficiary will be paid the Death Benefit. C) reduction in policy premium Cash Value vs. In the early years of a policy, life insurance companies can deduct fees upon cash surrender. a. Prepaid Rent. P is the insured on a participating life policy. The policy would retain a cash value component, but it would grow at a reduced rate. An automatic premium loan is not considered a Nonforfeiture Option. The cash surrender value will also be reduced by any outstanding loan amount. a. C) all past premiums will be refunded with interest It is taxed as ordinary income. How are surrender charges deducted in a life policy with a rear-end loaded provision? Which of these is NOT a characteristic of the Accelerated Death Benefit option? Cash surrender value applies to the savings element of whole life insurance policies payable before death. All of these would be factors that determine how much coverage can be purchased EXCEPT Extended Term Interest only is a settlement option. B) dies of a stroke Instead, you can access your accumulated cash value with the following options: If the policyholder does not make a selection, the terms of the policy will generally stipulate which option would go into effect if the policy lapses or is surrendered. A) Martial status B) payor provision What action will the insurer take? In a reduced paid-up insurance option, the policy owner receives a lower amount of payments made as premiums for the original whole life insurance. f. Six months interest at 8% on the note was paid on September 30. A) The policys cost basis is taxable Past due premiums are waived d. Accumulated Depreciation-Equipment. P will have to pay income taxes on the amount of premiums waived a) Both irrevocable and Revocable. The correct answer is "Automatic Premium Loan Option". A young, married teacher has two children and owns a Whole Life policy. C) waiver of premium C) The policys premiums will increase after 20 years However, during the early years of awhole life insurance policy, the savings portion brings little return compared to thepremiumspaid. One life insurance policy provision specifies that - Course Hero Let us have a look at your work and suggest how to improve it! Rapid depletion of proceeds can be avoided d. What price range is your specialty? The policy starts generating returns by the third year, and part of the revenue goes to policy reserve, while the remaining revenue goes to cover administrative costs, agent commissions, and acquisition costs. B) Payor rider ", "Standard nonforfeiture law for life insurance.". A) The face amount and policy premium are not affected by the payment S buys a $50,000 whole life policy with a $50,000 Accidental Death and Dismemberment rider. Claims are denied under the Suicide clause of the policy, Which of these statements about a Guaranteed Insurability Option rider is NOT TRUE? Grace period terms are stated in the policy. Who the policyowner is and what rights the policyowner is entitled to. Coverage can be added at specific ages, Evidence of insurability is required when the option is exercised. D) Nonforfeiture clause. Taxable *Dividends are a return of unused premiums on which the insured has already paid taxes. C) Extended term insurance B) Free-look period Accumulation at Interest An insured is past due on his life insurance premium, but is still within the Grace Period. Before issuing payment to the policy owner, outstanding loan amounts are satisfied with the cash value. B) No interest will be charged on loan balance Those on Social Security disability automatically qualify for this benefit Have a great time ahead. Taxable C. Nontaxable D. Tax Deductible B. A) Increases the policys cash value Refer to the earlier problem. During the claim process, the insurer discovers that L had understated her age on the application. These include white papers, government data, original reporting, and interviews with industry experts. A) Grace period Interest only is a settlement option. A nonforfeiture clause is an insurance policy clause stipulating that an insured party can receive full or partial benefits or a partial refund of premiums after a lapse due to non-payment. C) There may be a dollar limit on the maximum benefit Their purpose is to protect the insured's accumulated cash values in case the Whole Life or Endowment policy lapses. g. Salaries and Wages Expense A) Proof of insurability Which life insurance policy provision will permit Elaine to use the life insurance proceeds before she dies to pay for her medical care? B) Dividend options Azanswer team is here with the correct answer to your question. C) It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill

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