Policy Riders, Provisions, Options, and Exclusions
An insured and the sole beneficiary die in the same accident, and the order of death cannot be established. Why does a common disaster provision matter?
Answer and explanation
Answer: C. A common disaster provision addresses what happens where the insured and beneficiary die together and survivorship cannot be established, so the proceeds pass as the owner intended rather than through the beneficiary's estate. The policy is not voided, the proceeds are not escheated, and they are not split between estates by default.Source: NAIC — Life Insurance Buyer's Guide — Buyer's Guide page 6, Choose a beneficiary
More policy riders, provisions, options, and exclusions questions
- An owner wants the original permanent insurance plan to continue for a smaller amount with no further premiums. Which nonforfeiture option fits?
- An owner wants to replace a named irrevocable beneficiary with someone else. What additional requirement applies?
- Does a grace period provision apply to the initial premium on a life policy?
- Flexible premium features in universal life policies allow the owner to perform which action?
- From what point does the period for returning a newly issued life policy for a full refund normally run?
- How does a cost of living (COLA) rider adjust policy coverage over time?
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