Life Insurance Policy Provisions, Options, and Riders
A beneficiary elects a fixed period of ten years and dies in year six. What becomes of the remaining instalments?
Answer and explanation
Answer: D. A fixed-period settlement is a certain obligation for the term elected, so the unpaid instalments run to a contingent payee or to the beneficiary's estate. Payments measured by a lifetime and ending at death belong to the life income option.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, fixed period option
More life insurance policy provisions, options, and riders questions
- Why does the one-year term dividend option produce more death benefit per dividend dollar than paid-up additions?
- Why is a dividend on a participating life policy generally not taxable to the owner?
- Why is naming a minor directly as beneficiary of a life policy usually discouraged?
- Why might an owner name a trust as the beneficiary of a life insurance policy?
- A beneficiary receiving instalments under a spendthrift clause offers those future payments as security for a loan. What is the position?
- A child covered by a children's term rider reaches the age at which the cover ends. What is normally available?
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