Policy Riders, Provisions, Options, and Exclusions
A cash-value policyowner stops paying premiums but wants to preserve some policy value. Which group contains nonforfeiture choices?
Answer and explanation
Answer: A. Nonforfeiture choices allow the owner to retain value after discontinuing premiums. Common options are cash surrender, extended term insurance, and reduced paid-up insurance.Source: New York State Department of Financial Services — Life Insurance Information for Consumers — Glossary > Non-Forfeiture
More policy riders, provisions, options, and exclusions questions
- A life policy contains a status-type war exclusion and the insured, a service member, dies of an illness while stationed overseas in peacetime. How does the exclusion operate?
- A parent pays premiums on a juvenile life policy and dies before the insured child reaches majority. If the policy has a payor benefit rider and its conditions are met, what happens next?
- A parent wants life proceeds reserved for a young child. Which arrangement best addresses the problem that an insurer will not pay proceeds directly to a minor?
- A participating whole life owner wants to apply a declared dividend toward the next premium. Which dividend use matches that goal?
- A permanent policyowner withdraws the entire available cash value. What may happen to the policy?
- A policy beneficiary designation reads 'my surviving children, per capita.' If one child predeceases the insured leaving two offspring, how are proceeds divided?
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