Policy Riders, Provisions, Options, and Exclusions
An owner wants the original permanent insurance plan to continue for a smaller amount with no further premiums. Which nonforfeiture option fits?
Answer and explanation
Answer: B. Reduced paid-up insurance continues the original permanent plan at a reduced amount with no further premiums. Extended term instead uses value to buy temporary term coverage, while cash surrender ends the coverage for cash.Source: New York State Department of Financial Services — Life Insurance Information for Consumers — Glossary > Reduced Paid-up Insurance; Non-Forfeiture
More policy riders, provisions, options, and exclusions questions
- Which dividend option allows a participating policyowner to purchase additional small paid-up permanent coverage without evidence of insurability?
- Which exchange describes consideration in a life insurance contract?
- Which key details are summarized in the policy face page and insuring clause?
- Which life policy exclusion addresses death caused by hazards of the insured's specifically identified job?
- Which list contains common life insurance premium payment modes?
- Which party holds the exclusive right to borrow against policy cash values or request nonforfeiture options?
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