Policy Riders, Provisions, Options, and Exclusions
A participating policyowner wants a declared dividend to reduce the amount due at the next premium date. Which use fits?
Answer and explanation
Answer: A. NAIC guidance states that dividends can be used to lower premiums or buy more coverage, so reducing the next premium is a standard use. Accelerating the death benefit is a separate feature, the contestable period is fixed by statute, and complete premium waiver is a rider benefit rather than a dividend option.Source: NAIC — Life Insurance — Whole Life Insurance; use of dividends
More policy riders, provisions, options, and exclusions questions
- Where is the insurer's fundamental obligation to pay the death benefit upon receipt of proof of death set forth?
- Which beneficiary designation generally allows the owner to make a change without the beneficiary's consent?
- Which condition does federal guidance describe for the terminal illness exclusion for accelerated death benefits?
- Which description best identifies the coverage supplied by a term rider?
- Which exchange describes consideration in a life insurance contract?
- Which key details are summarized in the policy face page and insuring clause?
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