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
A 'waiver of premium' rider on a life insurance policy provides that:
Answer: Premiums are waived if the insured becomes totally disabled for a specified period
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.
An 'accidental death benefit' rider pays an additional death benefit if the insured dies:
Answer: As a direct result of accidental bodily injury within a specified time period
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.
Which nonforfeiture option provides the original face amount of life insurance for a reduced period of time?
Answer: Extended term insurance
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.
The 'guaranteed insurability' rider allows the policyowner to:
Answer: Purchase additional life insurance at specified dates or events without proving insurability
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.
When a life insurance policy has a 'reduced paid-up' nonforfeiture option, what happens?
Answer: The face amount is reduced and no further premiums are required
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.
Under a life insurance policy's 'facility of payment' clause, who may the insurer pay if the named beneficiary is a minor or incapacitated?
Answer: A relative or other person who can provide proof of financial dependency
The facility of payment clause allows the insurer to pay proceeds to a family member or other person who appears entitled to receive them when the named beneficiary cannot legally receive payment.