Life Insurance Policy Provisions, Options, and Riders
An owner takes a partial surrender in the fourth policy year of a universal life contract. What should be expected?
Answer and explanation
Answer: A. An early partial surrender usually attracts a surrender charge in the declining schedule and reduces both the account value and, under most designs, the death benefit. Guaranty associations do not levy such charges, and the value cannot be taken without reducing it.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, partial surrender charges
More life insurance policy provisions, options, and riders questions
- How do reduced paid-up and extended term differ in what each keeps from the original policy?
- How does a cost of living (COLA) rider adjust policy coverage over time?
- How does a joint and survivor life income differ from a joint life income?
- How does a long-term care (LTC) rider attached to a life policy fund care expenses?
- How does a partial withdrawal differ from a policy loan on a universal life policy?
- How does a survivorship clause in a common disaster provision operate?
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