LLQP Policy Provisions and Riders 5

Question 1

If a life insurance policyowner fails to select a nonforfeiture option after a policy lapses, which option typically applies automatically?

Accepted Answer

Extended term insurance

Answer

Extended term insurance is the default automatic nonforfeiture option for most policies, using the cash value to purchase term coverage equal to the original face amount for as long as possible.

Question 2

Under the return of premium rider, if the insured dies during the policy term, the beneficiary receives:

Accepted Answer

The face amount plus all premiums paid

Answer

The return of premium rider adds a death benefit equal to all premiums paid to the policy's face amount, so the beneficiary receives both the face value and a refund of premiums.

Question 3

The spendthrift clause in a life insurance policy protects the policy proceeds from:

Accepted Answer

Claims by the beneficiary's creditors before payment

Answer

A spendthrift clause prevents the beneficiary's creditors from attaching or garnishing the policy proceeds before they are actually distributed to the beneficiary.

Question 4

A family income rider provides an income stream that begins at the insured's death and continues for:

Accepted Answer

A fixed number of years from the policy issue date

Answer

The family income rider pays monthly income from the date of the insured's death until a specified period from the policy issue date expires, after which a lump sum may be paid.

Question 5

Which provision requires a life insurer to notify the policyowner that a premium is overdue and provide a grace period before the policy lapses?

Accepted Answer

Grace period provision

Answer

The grace period provision grants the policyowner a set number of days (typically 31 days) after a missed premium due date during which the policy remains in force without penalty.

LLQP - Life License Qualification Program Practice Test

LLQP - Life License Qualification Program Practice Test

LLQP Policy Provisions and Riders 5