Life and Health California Exam Life Insurance Policy Provisions and Riders 2

Question 1

A 'waiver of premium' rider on a life insurance policy provides that:

Accepted Answer

Premiums are waived if the insured becomes totally disabled for a specified period

Answer

The waiver of premium rider keeps the policy in force without premium payments if the insured becomes totally disabled, typically after a waiting period of 3 to 6 months.

Question 2

An 'accidental death benefit' rider pays an additional death benefit if the insured dies:

Accepted Answer

As a direct result of accidental bodily injury within a specified time period

Answer

The accidental death benefit (double indemnity) rider pays an additional amount—typically equal to the face amount—if death results directly and solely from accidental injury within a defined time period.

Question 3

Which nonforfeiture option provides the original face amount of life insurance for a reduced period of time?

Accepted Answer

Extended term insurance

Answer

The extended term nonforfeiture option uses the cash value to purchase term insurance in the same face amount as the original policy for as long as the cash value will sustain.

Question 4

The 'guaranteed insurability' rider allows the policyowner to:

Accepted Answer

Purchase additional life insurance at specified dates or events without proving insurability

Answer

The guaranteed insurability rider lets the policyowner buy additional coverage at specified option dates (e.g., marriage, birth of child, age milestones) without undergoing medical examination.

Question 5

When a life insurance policy has a 'reduced paid-up' nonforfeiture option, what happens?

Accepted Answer

The face amount is reduced and no further premiums are required

Answer

The reduced paid-up option uses the policy's cash value to purchase a paid-up whole life policy with a lower face amount—no further premiums are owed.

Life and Health California Exam Practice Test

Life and Health California Exam Practice Test

Life and Health California Exam Life Insurance Policy Provisions and Riders 2