LLQP Policy Provisions and Riders 3

Question 1

What is the 'misstatement of age' provision in a life insurance policy?

Accepted Answer

A provision that adjusts the death benefit to reflect what the premium would have purchased at the correct age

Answer

A provision that cancels the policy if the insured lied about their age

Answer

A provision requiring age verification before any claim is paid

Answer

A provision that increases premiums retroactively to the correct age

Question 2

What is the 'reinstatement' provision in a lapsed life insurance policy?

Accepted Answer

The right to restore a lapsed policy within a specified period by meeting certain conditions

Answer

The right to purchase a completely new policy at original rates

Answer

The right to reinstate a beneficiary who was previously removed

Answer

The right to restore policy loans that were previously repaid

Question 3

What is the 'accelerated death benefit' (ADB) or 'living benefit' rider?

Accepted Answer

A rider that allows the policyholder to receive a portion of the death benefit while still alive if diagnosed with a terminal illness

Answer

A rider that increases the death benefit each year

Answer

A rider that accelerates premium payments to shorten the payment period

Answer

A rider that provides benefits for accelerated aging conditions

Question 4

What is the 'spendthrift clause' in relation to life insurance beneficiary designations?

Accepted Answer

A clause that protects death benefit proceeds from the beneficiary's creditors

Answer

A clause that limits how much the policyholder can spend on premiums

Answer

A clause that penalizes the policyholder for excessive spending

Answer

A clause requiring the beneficiary to spend the proceeds within a specified time

Question 5

What is a 'child rider' on a life insurance policy?

Accepted Answer

A rider that provides term life insurance coverage on the insured's children

Answer

A rider that makes the child the policyholder

Answer

A rider that increases the death benefit when the policyholder has children

Answer

A rider that covers childcare costs if the insured dies

Question 6

What is the 'entire contract' provision in a Canadian life insurance policy?

Accepted Answer

A provision stating that the policy document and attached application constitute the complete agreement

Answer

A provision requiring the policyholder to read the entire policy before it takes effect

Answer

A provision that extends coverage to all of the policyholder's assets

Answer

A provision ensuring the insurer provides full coverage without exceptions