Chapter Questions
Briefly explain the following life insurance contractual provisions.a. Suicide clauseb. Grace periodc. Reinstatement clause
a. Describe the incontestable clause in a life insurance policy.b. What is the purpose of the incontestable clause?
a. Explain the requirements for reinstating a lapsed life insurance policy.b. What are the advantages and disadvantages of reinstating a lapsed life insurance policy?
Explain the following beneficiary designations.a. Primary and contingent beneficiaryb. Revocable and irrevocable beneficiaryc. Specific and class beneficiary
A life insurance policy is freely assignable to another party. Explain the following types of assignments:a. Absolute assignmentb. Collateral assignment
Describe the policy loan provision that appears in a typical cash-value life insurance policy.a. Why is interest charged on a policy loan?b. List the advantages and disadvantages of a policy loan.
A life insurance policy that pays dividends is known as a participating policy.a. Identify the sources from which dividends can be paid.b. List the various dividend options in a typical life insurance policy.c. Can an insurer guarantee the payment of a dividend? Explain your answer.
All states have nonforfeiture laws that require the payment of a cash-surrender value when a cash-value policy is surrendered. Briefly explain the following nonforfeiture options that are found in a typical life insurance policy.a. Cash-value optionb. Reduced paid-up insurancec. Extended term insurance
In addition to cash, life insurance death benefits can be paid under other settlement options. Briefly explain the following settlement options.a. Interest optionb. Fixed-period optionc. Fixed-amount optiond. Life income options
Explain the definition of total disability that is found in a typical waiver-of-premium provision.