Life Insurance Policy Provisions, Options, and Riders
A New York owner assigns a life policy as collateral for a loan. What does the assignment achieve?
Answer and explanation
Answer: C. An assignment transfers rights in the contract to the assignee to the extent the assignment provides, which is what makes a policy usable as collateral. It cannot change who is insured, does not by itself move the premium obligation, and does not alter the policy's premium status.Source: N.Y. Ins. Law § 3203 — 3203, Assignment of the contract
More life insurance policy provisions, options, and riders questions
- An insured with an accidental death and dismemberment rider loses the sight of both eyes in a covered accident. What does the rider ordinarily provide?
- An insured's health has deteriorated badly since issue. How does that affect the purchase of paid-up additions?
- An owner has relied on the automatic premium loan for several years running. What is the consequence?
- An owner stops paying premiums on a whole life policy and elects nothing. What does the policy generally do with the cash value?
- An owner takes a partial surrender in the fourth policy year of a universal life contract. What should be expected?
- An owner wants the original permanent insurance plan to continue for a smaller amount with no further premiums. Which nonforfeiture option fits?
621 New York questions like this one.
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