Life & Health Insurance Policy Provisions and Riders Questions and Answers

Question 1

An insured with a life insurance policy dies during the grace period. What is the insurer's obligation?

Accepted Answer

To pay the death benefit minus the overdue premium.

Answer

To pay the full death benefit to the beneficiary.

Answer

To deny the claim because the premium was not paid on time.

Answer

To refund all premiums paid to the policyowner's estate.

Question 2

Which of the following life insurance riders allows the policyowner to purchase additional insurance in the future without providing evidence of insurability?

Accepted Answer

Guaranteed Insurability Rider

Answer

Waiver of Premium Rider

Answer

Accidental Death Benefit Rider

Answer

Cost of Living Rider

Question 3

A policyowner made a material misstatement on their life insurance application. The insurer discovers this four years after the policy issue date. Which policy provision would prevent the insurer from voiding the contract?

Accepted Answer

Incontestability Provision

Answer

Reinstatement Provision

Answer

Free Look Provision

Answer

Entire Contract Provision

Question 4

John has a life insurance policy with a Waiver of Premium rider. He becomes totally disabled and is unable to work. After a six-month waiting period, what will happen?

Accepted Answer

The insurer will begin paying his premiums, keeping the policy in force.

Answer

The policy's cash value will be paid out to him in a lump sum.

Answer

The death benefit will be reduced by the amount of premiums waived.

Answer

The policy will be converted to a reduced paid-up insurance policy.

Question 5

An insured is diagnosed with a terminal illness and is not expected to live more than 12 months. Which rider would allow them to receive a portion of their life insurance death benefit while they are still alive?

Accepted Answer

Accelerated Death Benefit Rider

Answer

Return of Premium Rider

Answer

Long-Term Care Rider

Answer

Disability Income Rider

Question 6

All of the following are considered standard provisions in a life insurance policy EXCEPT:

Accepted Answer

Waiver of Premium

Answer

Grace Period

Answer

Incontestability Clause

Answer

Entire Contract Clause