Policy Riders, Provisions, Options, and Exclusions
A policyowner wants a lender to receive enough death proceeds to satisfy a loan balance. Which policy action may accomplish this?
Answer and explanation
Answer: C. A policyowner may use an assignment to give a lender rights in policy proceeds as collateral for a debt. Texas guidance notes that existing life insurance can be assigned to a lender for a loan balance.Source: Texas Department of Insurance — Life Insurance Guide — Other types of life insurance > Credit life; assigning death benefits to a lender
More policy riders, provisions, options, and exclusions questions
- A flexible-premium life policy has lapsed and the owner applies for reinstatement within the contractual period. Which combination may the insurer require?
- A flexible-premium policyowner pays the illustrated planned premium, but policy value later becomes insufficient for the monthly deduction. Which conclusion is most accurate?
- A governing beneficiary instrument expressly states how to distribute proceeds after simultaneous deaths. How does that fact affect Texas's default survival rules?
- A grandparent buys a juvenile life policy on a 5-year-old grandchild with a payor benefit rider. The grandparent dies 3 years later. What occurs regarding policy premiums?
- 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?
590 Texas questions like this one.
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