Policy Riders, Provisions, Options, and Exclusions
A permanent policyowner withdraws the entire available cash value. What may happen to the policy?
Answer and explanation
Answer: D. Texas consumer guidance warns that withdrawing the entire cash value may cause the insurer to cancel the policy, ending coverage. Withdrawals can also have tax consequences when amounts exceed premiums paid.Source: Texas Department of Insurance — Life Insurance Guide — Types of life insurance > Permanent life insurance; cash-value withdrawals
More policy riders, provisions, options, and exclusions questions
- An owner wants to replace a named irrevocable beneficiary with someone else. What additional requirement applies?
- Flexible premium features in universal life policies allow the owner to perform which action?
- How does a cost of living (COLA) rider adjust policy coverage over time?
- How does a long-term care (LTC) rider attached to a life policy fund care expenses?
- If a cash-value policyowner stops paying premiums and selects the extended term nonforfeiture option, what coverage is provided?
- If a policy contains a valid underwriting-based hazardous occupation exclusion and the insured dies from that excluded hazard, what must the insurer refund at minimum?
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