CMFAS Life Insurance M5 2

Question 1

What is the cash value of a life insurance policy?

Accepted Answer

The savings component that accumulates over time in permanent policies

Answer

The total premiums paid

Answer

The death benefit amount

Answer

The commission paid to the agent

Question 2

What is the grace period in a life insurance policy?

Accepted Answer

The period after a premium due date during which the policy remains in force

Answer

The time before a policy takes effect

Answer

The time to file a claim

Answer

The cooling-off period

Question 3

What is an endowment policy?

Accepted Answer

A policy that combines life insurance with savings, paying out at maturity or death

Answer

A pure protection policy

Answer

A policy with no cash value

Answer

A short-term rental insurance

Question 4

What is the contestability period?

Accepted Answer

A period (usually 2 years) during which the insurer can void a policy for misrepresentation

Answer

The time an agent has to sell the policy

Answer

The period to make premium payments

Answer

The time before the policy starts

Question 5

What is a rider in a life insurance policy?

Accepted Answer

An additional benefit or provision added to the base policy

Answer

A person who delivers the policy

Answer

A type of premium payment

Answer

A penalty clause

Question 6

What does 'sum assured' mean?

Accepted Answer

The guaranteed amount payable upon death or maturity

Answer

The premium amount

Answer

The cash value of the policy

Answer

The total returns expected